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NEW QUESTION: 1
Jason Bennett is an analyst for Valley Airlines (Valley), a U.S. firm. Valley owns a stake in Southwest Air Cargo (Southwest), also a U.S. firm. The two firms have had a long-standing relationship. The relationship has become even closer because several of Valley's top executives hold seats on Southwest's Board of Directors.
Valley acquired a 45% ownership stake in Southwest on December 31, 2007. Acquisition of the ownership stake cost $9 million and was paid in cash. Valley's stake in Southwest is such that management can account for the investment using either the equity method or the acquisition method. While Valley's management desires to fairly represent the firm's operating results, they have assigned Bennett to assess the impact of each method on reported financial statements.
Immediately prior to the acquisition. Valley's current asset balance and total equity were $96 million and
$80 million, respectively. Southwest's current assets and total equity were $32 million and $16 million, respectively.
While analyzing the use of the equity method versus the acquisition method, Bennett calculates the return on assets (ROA) ratio. He arrives at two conclusions:
Statement 1: Compared to the acquisition method, the equity method results in a higher ROA because of the higher net income under the equity method.
Statement 2: Compared to the acquisition method, the equity method results in a higher ROA because of the smaller level of total assets under the equity method.
In order to get a better picture of Valley's operating condition, Bennett is also considering the use of proportionate consolidation to account for Southwest. He makes the following statements regarding the acquisition method and a proportionate consolidation:
Statement 3: Both methods are widely accepted under the provisions of U.S. GAAP and International Financial Reporting Standards (IFRS).
Statement 4: Both methods report the same level of assets on the parent's balance sheet.
Statement 5: Both methods report all of Southwest's liabilities on the parent's balance sheet.
In addition. Valley has always wanted to pursue its goal of vertical integration by expanding its scope of operations to include the manufacturing of airline parts for its own airplanes. Therefore, it established a subsidiary, Mountain Air Parts (Mountain), in Switzerland on January 1,2008. Switzerland was chosen as the location for economic and geographical diversification reasons. Mountain will operate as a self- contained, independent subsidiary. Local management in Switzerland will make the majority of operating, financing, and investing decisions.
The Swiss franc (CHF) is the official currency in Switzerland. On January 1, 2008, the USD/CHF exchange rate was 0.77. At December 31, 2008, the exchange rate had changed to 0.85 USD/CHF. The average exchange rate in 2008 was 0.80 USD/CHF. In its first year of operations. Mountain paid no dividends and no taxes. Mountain uses the FIFO assumption for its flow of inventory.
Using the appropriate method of translation, the translation gain (loss) for the year ended 2008 is closest to:
A. $104.
B. $109.
C. $99.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
(Siudy Session 6, LOS 23-c,d)
The following financial starements reflect the use of the all-current method (functional currency is the CHF) since Mountain is a self-contained company and is less dependent on Valley. The solutions to Questions
100 and 101 pertain to the all-current method.
NEW QUESTION: 2
You have a computer that runs Windows 7.
Your network contains a VPN server that runs Windows Server 2008.
You need to authenticate to the VPN server by using a smart card.
Which authentication setting should you choose?
A. CHAP
B. EAP
C. PAP
D. MS-CHAP v2
Answer: B
Explanation:
VPN Server Software Requirements VPN server software requirements for smart card access are relatively straightforward. The remote access servers must run Windows 2000 Server or later, have Routing and Remote Access enabled, and must support Extensible Authentication Protocol-Transport Layer Security (EAPTLS). EAP-TLS is a mutual authentication mechanism developed for use in conjunction with security devices, such as smart cards and hardware tokens. EAP-TLS supports Point-to-Point Protocol (PPP) and VPN connections, and enables exchange of shared secret keys for MPPE, in addition to Ipsec. The main benefits of EAP-TLS are its resistance to brute-force attacks and its support for mutual authentication. With mutual authentication, both client and server must prove their identities to each other. If either client or server does not send a certificate to validate its identity, the connection terminates.Microsoft Windows Server 2003 supports EAP-TLS for dialup and VPN connections, which enables the use of smart cards for remote users. For more information about EAP-TLS, see the Extensible Authentication Protocol (EAP) topic at www.microsoft.com/resources/documentation/windows/xp/all/proddocs/en-us/auth_eap. mspx. For more information about EAP certificate requirements, see the Microsoft Knowledge Base article "Certificate Requirements when you use EAP-TLS or PEAP with EAP-TLS" at http://support.microsoft.com/default.aspx? scid=814394.
NEW QUESTION: 3
In the channel switching service uninterrupted feature, the mechanism for announcing a terminal to switch channels is defined by the 802.11h protocol.
A. Correct
B. False
Answer: A
NEW QUESTION: 4
A change must be made to a project to comply with municipal code. The project manager updates the relevant shared project documents. The key stakeholders subsequently update the documents with new information. When the project deliverables are reinspected, they fail the inspection. Which of the following is the MOST likely reason for the failed inspection?
A. Version control processes were not applied.
B. There were insufficient resources assigned to the task.
C. The prior document version was not reviewed.
D. The CCB was not contacted.
Answer: A
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