题目
Rocky Mountain Air Cargo is a privately held commercial aviation company serving the western United States. It publishes financial statements in accordance with U.S. GAAP and uses a fiscal year that matches the calendar year.
Rocky Mountain was in good financial shape heading into 2003, with assets of $50 million at the beginning of the fiscal year. That year, it earned $3 million in net income and was easily able to maintain its traditional 50 percent dividend payout ratio. However, Rocky Mountain had a very difficult year in 2004, reporting a loss of $800,000. It managed to pay $1 million in dividends, but the decision to pay dividends in such a weak financial year further undermined the company’s fiscal stability.
Flitenight Air Lines, a publicly-traded aviation firm serving the central and Midwestern United States, wanted to expand its range of service by coordinating its flight schedule with airlines serving different geographic regions ofNorth America. One of these airlines was Rocky Mountain Air Cargo.
To cement the relationship, Flitenight’s CEO, John “Bulldog” Basten, decided to make a significant investment in Rocky Mountain Air Cargo. He was easily able to convince both boards of the wisdom of the deal, and, in his usual brash style, personally negotiated the terms with his counterpart at Rocky Mountain, Buck Matthews. Flitenight Air Lines acquired a 20 percent stake in Rocky Mountain Air Cargo (with an option to purchase 40 percent more) for $10 million cash. The deal closed on January 1, 2003 and Flitenight accounted for the investment using the equity method.
Basten was not happy to find that he had invested right at the peak of Rocky Mountain’s profitability and wound up with a money-losing airline. He had a difficult conversation with Matthews in early 2005, complaining about the impact of the Rocky Mountain investment on Flitenight’s financials. Basten pointed out that he had a loss on his books: the original $10 million investment in Rocky Mountain was carried at only $9,940,000 on Flitenight’s December 31, 2004 balance sheet. Matthews countered that this was just an accounting entry: on a cash basis, Flitenight had a gain of 5 percent on its investment over the two years.
Matthews’ insistence that the investment had earned money for Flitenight did not sit well with Basten. Basten decided that Rocky Mountain was clearly being mismanaged and concluded it was time to gain control of the company.
Basten assured Neil Glenn, the Chairman of Flitenight’s board, that he could turn Rocky Mountain around. He promised Glenn that, in 2005, Rocky Mountain would once again achieve $3 million in earnings and a 50 percent payout ratio. “With those results,” Basten promised Glenn, “our asset accounts will value the Rocky Mountaininvestment at $10,240,000 on our December 31, 2005 balance sheet – so we’ll show a gain on our original investment.” Glenn was skeptical of anyone’s ability to turn the airline around so quickly. Even so, Glenn assured Basten, “If it takes you longer to turn it around, at least we’ll have the dividend income on our 2005 cash flow statements.”
Basten notified Matthews and Rocky Mountain’s board that Flitenight intended to exercise its option. At the direction of Basten and Glenn, Flitenight purchased the additional shares for cash and gained control of RockyMountain on December 31, 2004.
Part 1)
In 2003, Flitenight would reflect its investment in Rocky Mountain on its income statement by recording:
A)$300,000.
B)$900,000.
C)-$200,000.
D)$600,000.
第1题
Rocky Mountain Air Cargo is a privately held commercial aviation company serving the western United States. It publishes financial statements in accordance with U.S. GAAP and uses a fiscal year that matches the calendar year.
Rocky Mountain was in good financial shape heading into 2003, with assets of $50 million at the beginning of the fiscal year. That year, it earned $3 million in net income and was easily able to maintain its traditional 50 percent dividend payout ratio. However, Rocky Mountain had a very difficult year in 2004, reporting a loss of $800,000. It managed to pay $1 million in dividends, but the decision to pay dividends in such a weak financial year further undermined the company’s fiscal stability.
Flitenight Air Lines, a publicly-traded aviation firm serving the central and Midwestern United States, wanted to expand its range of service by coordinating its flight schedule with airlines serving different geographic regions ofNorth America. One of these airlines was Rocky Mountain Air Cargo.
To cement the relationship, Flitenight’s CEO, John “Bulldog” Basten, decided to make a significant investment in Rocky Mountain Air Cargo. He was easily able to convince both boards of the wisdom of the deal, and, in his usual brash style, personally negotiated the terms with his counterpart at Rocky Mountain, Buck Matthews. Flitenight Air Lines acquired a 20 percent stake in Rocky Mountain Air Cargo (with an option to purchase 40 percent more) for $10 million cash. The deal closed on January 1, 2003 and Flitenight accounted for the investment using the equity method.
Basten was not happy to find that he had invested right at the peak of Rocky Mountain’s profitability and wound up with a money-losing airline. He had a difficult conversation with Matthews in early 2005, complaining about the impact of the Rocky Mountain investment on Flitenight’s financials. Basten pointed out that he had a loss on his books: the original $10 million investment in Rocky Mountain was carried at only $9,940,000 on Flitenight’s December 31, 2004 balance sheet. Matthews countered that this was just an accounting entry: on a cash basis, Flitenight had a gain of 5 percent on its investment over the two years.
Matthews’ insistence that the investment had earned money for Flitenight did not sit well with Basten. Basten decided that Rocky Mountain was clearly being mismanaged and concluded it was time to gain control of the company.
Basten assured Neil Glenn, the Chairman of Flitenight’s board, that he could turn Rocky Mountain around. He promised Glenn that, in 2005, Rocky Mountain would once again achieve $3 million in earnings and a 50 percent payout ratio. “With those results,” Basten promised Glenn, “our asset accounts will value the Rocky Mountaininvestment at $10,240,000 on our December 31, 2005 balance sheet – so we’ll show a gain on our original investment.” Glenn was skeptical of anyone’s ability to turn the airline around so quickly. Even so, Glenn assured Basten, “If it takes you longer to turn it around, at least we’ll have the dividend income on our 2005 cash flow statements.”
Basten notified Matthews and Rocky Mountain’s board that Flitenight intended to exercise its option. At the direction of Basten and Glenn, Flitenight purchased the additional shares for cash and gained control of RockyMountain on December 31, 2004.
Part 3)
If Flitenight were to account for its Rocky Mountain investment using the cost method instead of the equity method, Flitenight’s 2004 income statement would reflect its investment in Rocky Mountain by including which of the following?
A)Only a loss of $160,000.
B)Only income of $200,000.
C)Both dividends received by Flitenight from RockyMountain and Flitenight’s share of Rocky Mountain’s earnings.
D)Nothing, since the cost of the acquisition is not adjusted until the asset is sold.
第2题
Rocky Mountain Air Cargo is a privately held commercial aviation company serving the western United States. It publishes financial statements in accordance with U.S. GAAP and uses a fiscal year that matches the calendar year.
Rocky Mountain was in good financial shape heading into 2003, with assets of $50 million at the beginning of the fiscal year. That year, it earned $3 million in net income and was easily able to maintain its traditional 50 percent dividend payout ratio. However, Rocky Mountain had a very difficult year in 2004, reporting a loss of $800,000. It managed to pay $1 million in dividends, but the decision to pay dividends in such a weak financial year further undermined the company’s fiscal stability.
Flitenight Air Lines, a publicly-traded aviation firm serving the central and Midwestern United States, wanted to expand its range of service by coordinating its flight schedule with airlines serving different geographic regions ofNorth America. One of these airlines was Rocky Mountain Air Cargo.
To cement the relationship, Flitenight’s CEO, John “Bulldog” Basten, decided to make a significant investment in Rocky Mountain Air Cargo. He was easily able to convince both boards of the wisdom of the deal, and, in his usual brash style, personally negotiated the terms with his counterpart at Rocky Mountain, Buck Matthews. Flitenight Air Lines acquired a 20 percent stake in Rocky Mountain Air Cargo (with an option to purchase 40 percent more) for $10 million cash. The deal closed on January 1, 2003 and Flitenight accounted for the investment using the equity method.
Basten was not happy to find that he had invested right at the peak of Rocky Mountain’s profitability and wound up with a money-losing airline. He had a difficult conversation with Matthews in early 2005, complaining about the impact of the Rocky Mountain investment on Flitenight’s financials. Basten pointed out that he had a loss on his books: the original $10 million investment in Rocky Mountain was carried at only $9,940,000 on Flitenight’s December 31, 2004 balance sheet. Matthews countered that this was just an accounting entry: on a cash basis, Flitenight had a gain of 5 percent on its investment over the two years.
Matthews’ insistence that the investment had earned money for Flitenight did not sit well with Basten. Basten decided that Rocky Mountain was clearly being mismanaged and concluded it was time to gain control of the company.
Basten assured Neil Glenn, the Chairman of Flitenight’s board, that he could turn Rocky Mountain around. He promised Glenn that, in 2005, Rocky Mountain would once again achieve $3 million in earnings and a 50 percent payout ratio. “With those results,” Basten promised Glenn, “our asset accounts will value the Rocky Mountaininvestment at $10,240,000 on our December 31, 2005 balance sheet – so we’ll show a gain on our original investment.” Glenn was skeptical of anyone’s ability to turn the airline around so quickly. Even so, Glenn assured Basten, “If it takes you longer to turn it around, at least we’ll have the dividend income on our 2005 cash flow statements.”
Basten notified Matthews and Rocky Mountain’s board that Flitenight intended to exercise its option. At the direction of Basten and Glenn, Flitenight purchased the additional shares for cash and gained control of RockyMountain on December 31, 2004.
Part 4)
Which of the following statements about the consolidation method and the equity method is FALSE?
A)Both result in the same net income.
B)Only capital flows between parent and investee (such as dividends) appear in the cash flows of the parent.
C)Both result in the same net worth.
D)Both result in the same ROE.
第3题
Rocky Mountain Air Cargo is a privately held commercial aviation company serving the western United States. It publishes financial statements in accordance with U.S. GAAP and uses a fiscal year that matches the calendar year.
Rocky Mountain was in good financial shape heading into 2003, with assets of $50 million at the beginning of the fiscal year. That year, it earned $3 million in net income and was easily able to maintain its traditional 50 percent dividend payout ratio. However, Rocky Mountain had a very difficult year in 2004, reporting a loss of $800,000. It managed to pay $1 million in dividends, but the decision to pay dividends in such a weak financial year further undermined the company’s fiscal stability.
Flitenight Air Lines, a publicly-traded aviation firm serving the central and Midwestern United States, wanted to expand its range of service by coordinating its flight schedule with airlines serving different geographic regions ofNorth America. One of these airlines was Rocky Mountain Air Cargo.
To cement the relationship, Flitenight’s CEO, John “Bulldog” Basten, decided to make a significant investment in Rocky Mountain Air Cargo. He was easily able to convince both boards of the wisdom of the deal, and, in his usual brash style, personally negotiated the terms with his counterpart at Rocky Mountain, Buck Matthews. Flitenight Air Lines acquired a 20 percent stake in Rocky Mountain Air Cargo (with an option to purchase 40 percent more) for $10 million cash. The deal closed on January 1, 2003 and Flitenight accounted for the investment using the equity method.
Basten was not happy to find that he had invested right at the peak of Rocky Mountain’s profitability and wound up with a money-losing airline. He had a difficult conversation with Matthews in early 2005, complaining about the impact of the Rocky Mountain investment on Flitenight’s financials. Basten pointed out that he had a loss on his books: the original $10 million investment in Rocky Mountain was carried at only $9,940,000 on Flitenight’s December 31, 2004 balance sheet. Matthews countered that this was just an accounting entry: on a cash basis, Flitenight had a gain of 5 percent on its investment over the two years.
Matthews’ insistence that the investment had earned money for Flitenight did not sit well with Basten. Basten decided that Rocky Mountain was clearly being mismanaged and concluded it was time to gain control of the company.
Basten assured Neil Glenn, the Chairman of Flitenight’s board, that he could turn Rocky Mountain around. He promised Glenn that, in 2005, Rocky Mountain would once again achieve $3 million in earnings and a 50 percent payout ratio. “With those results,” Basten promised Glenn, “our asset accounts will value the Rocky Mountaininvestment at $10,240,000 on our December 31, 2005 balance sheet – so we’ll show a gain on our original investment.” Glenn was skeptical of anyone’s ability to turn the airline around so quickly. Even so, Glenn assured Basten, “If it takes you longer to turn it around, at least we’ll have the dividend income on our 2005 cash flow statements.”
Basten notified Matthews and Rocky Mountain’s board that Flitenight intended to exercise its option. At the direction of Basten and Glenn, Flitenight purchased the additional shares for cash and gained control of RockyMountain on December 31, 2004.
Part 2)
Since the coordination of flight schedules implies a stronger economic link between Rocky Mountain and Flitenight Air Lines than that implied merely by the ownership percentage, a proportionate consolidation is being considered. Which of the following statements regarding the consolidation method and the proportionate consolidation method is CORRECT?
A)Both are provisions of U.S. GAAP.
B)Both report all of the affiliate’s liabilities on the parent’s balance sheet.
C)Both report the same level of assets on the parent’s balance sheet.
D)The proportionate consolidation method differs from the consolidation method in its treatment of minorityinterest.
第4题
Rocky Mountain Air Cargo is a privately held commercial aviation company serving the western United States. It publishes financial statements in accordance with U.S. GAAP and uses a fiscal year that matches the calendar year.
Rocky Mountain was in good financial shape heading into 2003, with assets of $50 million at the beginning of the fiscal year. That year, it earned $3 million in net income and was easily able to maintain its traditional 50 percent dividend payout ratio. However, Rocky Mountain had a very difficult year in 2004, reporting a loss of $800,000. It managed to pay $1 million in dividends, but the decision to pay dividends in such a weak financial year further undermined the company’s fiscal stability.
Flitenight Air Lines, a publicly-traded aviation firm serving the central and Midwestern United States, wanted to expand its range of service by coordinating its flight schedule with airlines serving different geographic regions ofNorth America. One of these airlines was Rocky Mountain Air Cargo.
To cement the relationship, Flitenight’s CEO, John “Bulldog” Basten, decided to make a significant investment in Rocky Mountain Air Cargo. He was easily able to convince both boards of the wisdom of the deal, and, in his usual brash style, personally negotiated the terms with his counterpart at Rocky Mountain, Buck Matthews. Flitenight Air Lines acquired a 20 percent stake in Rocky Mountain Air Cargo (with an option to purchase 40 percent more) for $10 million cash. The deal closed on January 1, 2003 and Flitenight accounted for the investment using the equity method.
Basten was not happy to find that he had invested right at the peak of Rocky Mountain’s profitability and wound up with a money-losing airline. He had a difficult conversation with Matthews in early 2005, complaining about the impact of the Rocky Mountain investment on Flitenight’s financials. Basten pointed out that he had a loss on his books: the original $10 million investment in Rocky Mountain was carried at only $9,940,000 on Flitenight’s December 31, 2004 balance sheet. Matthews countered that this was just an accounting entry: on a cash basis, Flitenight had a gain of 5 percent on its investment over the two years.
Matthews’ insistence that the investment had earned money for Flitenight did not sit well with Basten. Basten decided that Rocky Mountain was clearly being mismanaged and concluded it was time to gain control of the company.
Basten assured Neil Glenn, the Chairman of Flitenight’s board, that he could turn Rocky Mountain around. He promised Glenn that, in 2005, Rocky Mountain would once again achieve $3 million in earnings and a 50 percent payout ratio. “With those results,” Basten promised Glenn, “our asset accounts will value the Rocky Mountaininvestment at $10,240,000 on our December 31, 2005 balance sheet – so we’ll show a gain on our original investment.” Glenn was skeptical of anyone’s ability to turn the airline around so quickly. Even so, Glenn assured Basten, “If it takes you longer to turn it around, at least we’ll have the dividend income on our 2005 cash flow statements.”
Basten notified Matthews and Rocky Mountain’s board that Flitenight intended to exercise its option. At the direction of Basten and Glenn, Flitenight purchased the additional shares for cash and gained control of RockyMountain on December 31, 2004.
Part 6)
Regarding Basten’s and Glenn’s statements about the impact of Rocky Mountain on Flitenight’s 2005 balance sheet and cash flow statement, which is CORRECT?
A)Basten’s statement is incorrect and Matthews’ statement is incorrect.
B)Basten’s statement is correct and Matthews’ statement is incorrect.
C)Basten’s statement is correct and Matthews’ statement is correct.
D)Basten’s statement is incorrect and Matthews’ statement is correct.
第5题
Rocky Mountain Air Cargo is a privately held commercial aviation company serving the western United States. It publishes financial statements in accordance with U.S. GAAP and uses a fiscal year that matches the calendar year.
Rocky Mountain was in good financial shape heading into 2003, with assets of $50 million at the beginning of the fiscal year. That year, it earned $3 million in net income and was easily able to maintain its traditional 50 percent dividend payout ratio. However, Rocky Mountain had a very difficult year in 2004, reporting a loss of $800,000. It managed to pay $1 million in dividends, but the decision to pay dividends in such a weak financial year further undermined the company’s fiscal stability.
Flitenight Air Lines, a publicly-traded aviation firm serving the central and Midwestern United States, wanted to expand its range of service by coordinating its flight schedule with airlines serving different geographic regions ofNorth America. One of these airlines was Rocky Mountain Air Cargo.
To cement the relationship, Flitenight’s CEO, John “Bulldog” Basten, decided to make a significant investment in Rocky Mountain Air Cargo. He was easily able to convince both boards of the wisdom of the deal, and, in his usual brash style, personally negotiated the terms with his counterpart at Rocky Mountain, Buck Matthews. Flitenight Air Lines acquired a 20 percent stake in Rocky Mountain Air Cargo (with an option to purchase 40 percent more) for $10 million cash. The deal closed on January 1, 2003 and Flitenight accounted for the investment using the equity method.
Basten was not happy to find that he had invested right at the peak of Rocky Mountain’s profitability and wound up with a money-losing airline. He had a difficult conversation with Matthews in early 2005, complaining about the impact of the Rocky Mountain investment on Flitenight’s financials. Basten pointed out that he had a loss on his books: the original $10 million investment in Rocky Mountain was carried at only $9,940,000 on Flitenight’s December 31, 2004 balance sheet. Matthews countered that this was just an accounting entry: on a cash basis, Flitenight had a gain of 5 percent on its investment over the two years.
Matthews’ insistence that the investment had earned money for Flitenight did not sit well with Basten. Basten decided that Rocky Mountain was clearly being mismanaged and concluded it was time to gain control of the company.
Basten assured Neil Glenn, the Chairman of Flitenight’s board, that he could turn Rocky Mountain around. He promised Glenn that, in 2005, Rocky Mountain would once again achieve $3 million in earnings and a 50 percent payout ratio. “With those results,” Basten promised Glenn, “our asset accounts will value the Rocky Mountaininvestment at $10,240,000 on our December 31, 2005 balance sheet – so we’ll show a gain on our original investment.” Glenn was skeptical of anyone’s ability to turn the airline around so quickly. Even so, Glenn assured Basten, “If it takes you longer to turn it around, at least we’ll have the dividend income on our 2005 cash flow statements.”
Basten notified Matthews and Rocky Mountain’s board that Flitenight intended to exercise its option. At the direction of Basten and Glenn, Flitenight purchased the additional shares for cash and gained control of RockyMountain on December 31, 2004.
Part 5)
Regarding Basten’s and Matthews’ statements about the gain/loss that Flitenight had at the end of 2004 on its investment in Rocky Mountain, which is CORRECT?
A)Basten’s statement is correct and Matthews’ statement is incorrect.
B)Basten’s statement is incorrect and Matthews’ statement is incorrect.
C)Basten’s statement is incorrect and Matthews’ statement is correct.
D)Basten’s statement is correct and Matthews’ statement is correct.
第6题
What can be said about the experiments at Rocky Mountain Arsenal?
A) They have no practical value in earthquake prevention.
B) They may have practical value in earthquake prevention.
C) They are certain to have practical value in earthquake prevention.
D) The article does not say anything about their practical value in earthquake prevention.
第7题
A.the Appalachian Mountains
B.the Rocky Mountains
C.the Green Mountains
D.the Blue Ridge Mountains
第8题
Please Fasten Your Seatbelts Severe turbulence (湍流) can kill aircraft passengers. Now, in test flights over the Rocky Mountains, NASA (美国航空航天局) engineers have successfully detected clear-air turbulence up to 10 seconds before an aircraft hits it.
Clear-air turbulence often catches pilots by surprise. Invisible to radar, it is difficult to forecast and can hurl (用力抛出去) passengers about the cabin. In December 1997, one passenger died and a hundred others were injured when unexpected rough air caused a United Airlines flight over the Pacific to drop 300 metres in a few seconds.
However, passengers can avoid serious injury by fastening their seatbelts. “It is the only antidote (对策) for this sort of things,” says Rod Bogue, project manager at NASA’s Dryden Flight Research Center in Edwards, California.
The centre’s new turbulence detector is based on lidar, or laser radar, Laser pulses are sent ahead of the plane and these are then reflected back by particles in the air. The technique depends on the Doppler effect. The wavelength of the light shifts according to the speed at which the particles are approaching. In calm air, the speed equals the plane’s airspeed. But as the particles swirl (打漩) in rough air, their speed of approach increases or decreases rapidly. The rate of change in speed corresponds to the severity (激烈程度) of the turbulence.
In a series of tests that began last month, a research jet flew repeatedly into disturbed air over the mountain ridges (山脉) near Pueblo, Colorado. The lidar detector spotted turbulence between 3 and 8 kilometres ahead, and its forecasts of strength and duration corresponded closely with the turbulence that the plane encountered.
Bogue says that he had “ a comfortable amount of time” to fasten his seatbelt. The researchers are planning to improve the lidar’s range with a more powerful beam. The system could be installed on commercial aircraft in the next few years.
第6题:What does “clear-air turbulence” probably mean? (Paragraph 1)
A.A not very rough storm.
B.Unexpected disturbed air.
C.A kind of visible storm.
D.A storm over mountain ridges.
第9题
What did scientists learn about earthquakes at the Rocky Mountain Arsenal?
A) They occur at about 4,000 metres below ground level.
B) The injection of water into earthquake faults prevents earthquakes from occurring.
C) They are usually caused by the oil in the faults.
D) Harmful earthquakes earl be possibly prevented by causing small, harmless earthquakes.
第10题
The San Andreas fault is ______.
A) an active fault system
B) a place where earthquakes have been predicted accurately
C) a place where earthquakes have been controlled
D) the location of the Rocky Mountain
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