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NEW QUESTION: 1
Kevin Rathbun, CFA, is a financial analyst at a major brokerage firm. His supervisor, Elizabeth Mao, CFA, asks him to analyze the financial position of Wayland, Inc. (Wayland), a manufacturer of components for high quality optic transmission systems. Mao also inquires about the impact of any unconsolidated investments.
On December 31,2007, Wayland purchased a 35% ownership interest in a strategic new firm called Optimax for $300,000 cash. The pre-acquisition balance sheets of both firms are found in Exhibit 1.
On the acquisition date, all of Optimax's assets and liabilities were stated on its balance sheet at their fair values except for its property, plant, and equipment (PP&E), which had a fair value of $1.2 million. The remaining useful life of the PP&E is ten years with no salvage value. Both firms use the straight-line depreciation method.
For the year ended 2008, Optimax reported net income of $250,000 and paid dividends of $100,000.
During the first quarter of 2009, Optimax sold goods to Wayland and recognized $15,000 of profit from the sale. At the end of the quarter, half of the goods purchased from Optimax remained in Wayland's inventory.
Wayland currently uses the equity method to account for its investment in Optimax. However, given the potential significance of the investment in the future, Rathbun believes that a proportionate consolidation of Optimax may give a clearer picture of the financial and operating characteristics of Wayland.
Rathbun also notes that Wayland owns shares in Vanry, Inc. (Vanry). Rathbun gathers the data in Exhibit 2 from Wayland's financial statements. The year-end portfolio value is the market value of all Vanry shares held on December 31. All security transactions occurred on July 1, and the transaction price is the price that Wayland actually paid for the shares acquired. Vanry pays a cash dividend of $1 per share at the end of each year. Wayland expects to sell its investment in Vanry in the near term and accounts for it as held- for-trading.
Wayland owns some publicly traded bonds of the Rotor Corporation that it reports as held-to-maturity securities.
Which of the following pairs contain statements regarding the equity method and proportionate consolidation that are both correct?
A. Proportionate consolidation results in higher net income, AND both methods will result in the same total equity.
B. The equity method will result in a higher net income if the subsidiary is profitable; proportionate consolidation will result in a higher net income if the subsidiary is not profitable; AND proportionate consolidation requires inclusion of minority interest accounts whereas the equity method does not.
C. Both methods result in the same net income, AND proportionate consolidation will result in higher cost of goods sold.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Proportionate consolidation and the equity method both lead to the same net income and the same shareholders' equity. COGS arc higher under proportionate consolidation as compared to the equity method. Under proportionate consolidation, the investor recognizes its pro-rata share of each income statement account. Under the equity method, the investor recognizes its pro-rata share of the investec's earnings in one line of the income statement. (Study Session 5, LOS 21.c)
NEW QUESTION: 2
Your network contains an Active Directory domain named contoso.com. The domain contains a server named Server1 that runs Windows Server 2012 R2. Server1 has the Hyper-V server role installed. The domain contains a virtual machine named VM1. A developer wants to attach a debugger to VM1.
You need to ensure that the developer can connect to VM1 by using a named pipe.
Which virtual machine setting should you configure?
A. BIOS
B. COM 1
C. Network Adapter
D. Processor
Answer: B
Explanation:
Named pipes can be used to connect to a virtual machine by configuring COM 1.
References: http://support.microsoft.com/kb/819036 http://support.microsoft.com/kb/141709
NEW QUESTION: 3
A. Option A
B. Option D
C. Option C
D. Option B
Answer: A,D
NEW QUESTION: 4
Why would you use the Integration Tool Kit?
A. To eliminate the need to manually update data in Ariba to match ERP
B. To transfer updates from an ERP system to SAP Ariba on scheduled basis
C. To transfer updates from an ERP system to SAP Ariba in real time
D. To ensure data is synchronized across all SAP Ariba applications
Answer: A,B
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