The Jumpstart Our Business Startups Act of 2012 (JOBS) facilitates capital formation by emerging growth companies by:

Select one:

A. Providing funding for qualifying projects.

B. Providing a safe harbor for pro forma information.

C. Exempting them from certain SEC reporting requirements.

D. Guaranteeing a minimum securities value for their investors.

SET4

A firm carries a commodity inventory at a cost of $750,000 and plans to sell it in 60 days. Its market value is currently $800,000. To hedge against a decline in value of the commodity, the company sells commodity futures for delivery in 60 days at a price of $800,000. There is no margin deposit. At the company's 2020 year-end, 30 days later, the 30-day futures price is $780,000 and the inventory value declined to $779,000. Income effects of the inventory and the futures are reported in cost of goods sold.

What is the net effect of value changes in the futures and the inventory on cost of goods sold?

Select one: A. Increase $1,000 B. Increase $21,000 C. Decrease $1,000 D. No effect

A company uses futures to hedge a firm commitment to buy inventory. Which statement is true concerning the hedge?

Select one:

A. The company takes a short position in futures and records changes in their value in OCI.

B. The company takes a long position in futures and records changes in their value in income.

C. The company takes a short position in futures and records changes in their value in income.

D. The company takes a long position in futures and records changes in their value in OCI.

A company has $1,000,000 in variable rate debt, with interest due on December 31 of each year. Interest is set at the Treasury bill rate plus 1.2%. The principal of the loan is due December 31, 2021. On January 1, 2020, the company enters a two-year receive variable/pay fixed interest rate swap, at a fixed rate of 2.2%. The swap is settled at the end of each year. The Treasury bill rate for 2020 is 0.8%, and it is 0.7% in 2021. The company records the swap at the expected future receipts/payments, equal to the receipt/payment for the current year, discounted at the variable rate. The swap qualifies as a cash flow hedge of the variable interest payments, and income effects of the debt and the swap are reported in interest expense.

On January 1, 2020, the company records the swap agreement as a(n)

Select one: A. asset of $3,883. B. asset of $3,561. C. liability of $3,561. D. liability of $3,883.

The proprietary funds balance sheet reports:

Select one: A. Unassigned fund balance. B. Budgeted expenditures. C. Net position. D. Proceeds from sale of property.