Question

6. Suppose that, as a fund manager, you purchase 5.000 shares of Company X on 1 Jan. 2019 for 10 TL each in order to keep and earn dividends. Simultaneously, you also purchase 4.000 shares of Company Y for 7,5 TL each for trading purposes. The share price of Company X increases to 12 TL, but after a while it drops to 11,2 TL and you sell 3.000 shares. On the other hand, the share price of Company Y drops to 7 TL, but after a while it increases to 7,6 TL and you sell 2.500 shares. Assuming that there are no more price movements throughout the year, what would be the comprehensive income as of the year end?

1. 4.000

2. 6.400

3. 1.600

4. 2.400 

7. Mr. X establishes a company with 220.000 TL of cash. 190.000 TL of this cash amount is paid to a supplier for an equipment purchase. Then the company has a great opportunity to enter into a project, but it has limited cash to invest in that project. Therefore, it decides to issue bonds and shares to the investors in order to raise funds. On the bond side, the company issues a 30.000 TL of 3-year zero-coupon bonds. The market yield is 10%. On the share side, however, the company issues 50.000 TL of common stock (par value: 1 TL each) at a price of 2,4 TL. At the time of these transactions are completed, what would be the total assets of the company?

1. 370.000

2. 355.080

3. 340.000

4. 362.540

8. At the time of starting its business, a company has only a cash account of 120.000 TL and a common stock account of 120.000 TL (par value: 1 TL each). The company issues new shares of 20.000 TL to the public at a price of 3 TL. However, after the public offering, the share prices decline to 2,3 TL. The company decides to buy back 8.000 of its shares. Assuming that the company applies par value method for accounting for treasury shares, what would be the total shareholders’ equity in the balance sheet at the end of all of these transactions?

1. 41.600

2. 158.400

3. 161.600

4. 172.000

9. Have a look at the following journal entry. What kind of a transaction might be happening in the company?

1. It is declaring to pay 100.000 TL stock dividends

2. It is issuing 100.000 TL common stock

3. It is paying 100.000 TL cash dividends

4. It is repurchasing 100.000 TL of its own shares.

10.  Which one of the following statements is TRUE considering the two types of transactions below?

1. Share repurchases may be a substitute for cash dividends

2. Share repurchases are not declared as in the case of cash dividends

3. Share repurchases must always be treated by debiting treasury shares at cost.

4. Share repurchases are not relevant for shareholders’ equity

11. Suppose that you are a lender. You have extended a loan to a customer at the beginning of the year. The loan had a 100.000 TL principal, 10% interest and 5 years maturity. However, at the end of the first year of the loan, due to the economic turbulence, your customer started to encounter a serious financial trouble. The loan eventually became doubtful, but you decided to make a provision for 60% of the loan. You continued to evaluate the issue and finally came up with an agreement with the customer. The agreement is that the customer would immediately pay 50.000 TL to settle the loan. What would be your approximate total profit or loss for this specific loan?

1. 23.620 TL loss

2. 16.552 TL profit

3. 50.172 TL loss

4. 33.620 TL loss

THANK YOU SO VERY MUCH FOR YOUR HELP!