Question

Read the 2015 annual report of Air France – KLM and answer the 20 questions asked...

Read the 2015 annual report of Air France – KLM and answer the 20 questions asked regarding the accounting issues. Link is provided below:

http://www.airfranceklm.com/sites/default/files/publications/afkl_registration_doc_2015.pdf

1. Air France-KLM reports ‘Consolidated statement of recognized income and expenses’ for the year ended December 31, 2015. If this statement was a U.S. GAAP statement, what would be the title of this statement?

a. Consolidated statement of total net income

b. Consolidated statement of other comprehensive income

c. Consolidated statement of comprehensive income

d. Consolidated statement of recognized net income

2. What method does Air France-KLM use for the Statement of Cash Flows?

a. Indirect method

b. Direct method

c. Gross method

d. Net method

3. The basic and diluted earnings per share for the year ended December 31, 2015, indicates that Air France-KLM has:

a. no convertible debts.

b. some dilutive securities.

c. no preferred stocks.

d. some treasury stocks.

4. What method is used to account for investments in companies over which Air France-KLM can ‘exercise significant influence on financial and operating policy decisions?’

a. Cost method

b. Liability method

c. Equity method

d. Fair value method

5. Sale of passenger tickets is accounted for at the time of ticket sale as:

a. Sales revenue

b. Deferred revenue

c. Contingent asset

d. No recognition

6. How does Air France account for business combination costs other than those related to the issuance of debt or equity securities?

a. Expensed as incurred

b. Capitalized as incurred

c. Included in goodwill

d. Used to offset fair value of the acquisition

7. Which of the following is not an ‘accumulated other comprehensive income’ item among those reported in the ‘reserves and retained earnings’ in the 2015 consolidated balance sheet of Air France-KLM?

a. Available for sale securities reserves.

b. Derivatives reserves.

c. Legal reserves.

d. Pension defined benefits reserves.

8. What is the carrying amount of investments in debt and equity securities that are classified as available-for-sale?

a. Fair value Cost

b. Amortized cost

c. Lower of cost or market

9. Inventories are carried at:

a. The lower of the first-in-first-out cost or net realizable value.

b. The first-in-first-out cost.

c. The lower of the weighted-average cost or net realizable value.

d. The weighted-average cost.

10. Air France-KLM classifies its frequent flyer programs as:

a. Noncurrent liability

b. Current liability

c. Current asset

d. Other debt

11. The followings are included in Air France-KLM’s intangible assets, except for:

a. Trademarks

b. Leased aircraft

c. Customer relationships

d. Slots for takeoff and landing

12. Air France-KLM reports bank overdrafts as:

a. A contra account to cash and cash equivalents.

b. A current liability.

c. An expense.

d. A bank deposits in transit.

13. Which method does Air France-KLM use to record depreciation expense for its flight equipment?

a. The activity-based method.

b. The sum-of-years’-digit method.

c. The straight-line method.

d. The group method.

14. Which accounting standards does Air France-KLM use?

a. U.S. GAAP

b. French GAAP

c. Netherlands GAAP

d. International Financial Reporting Standards

15. As of December 31, 2015, what assets are held for sale?

a. Land

b. Aircraft

c. Equipment

d. Buildings

16. Which of the following is included in ‘income from operating activities’ but not in ‘income from current operations?

a. Sale of aircraft equipment

b. Research and development costs

c. Bad debt expense

d. Interest revenue

17. Which of the following is not true about accounting treatment for the overhaul cost of major airframe and engine?

a. The cost is treated as separate asset component.

b. The cost is capitalized.

c. The cost is depreciated over the remaining useful life.

d. The cost is expensed as incurred.

18. How are financial assets accounted for if the Air France-KLM intends to sell them in the near future to realize capital gains?

a. At fair value with fair value changes recognized in the current period profit and loss

b. At fair value with fair value changes recognized as other comprehensive income

c. At cost with no recognition of fair value changes

d. At amortized cost with no recognition of fair value changes

19. Which of the following is not true about impairment test?

a. Tangible fixed assets, intangible assets, goodwill, and other assets with indefinite useful life are subject to an impairment test.

b. The impairment test is done at least once a year.

c. Recoverable value is the lower of the net realizable value and value in use.

d. The value in use is determined according to the discounted future cash flow method.

20. Which of the following is not an ‘other non-current income and expenses’ item?

a. Restructuring costs

b. Gains and losses on disposal of shares available for sale

c. Gains and losses on disposal of subsidiaries and affiliates

d. Gains and losses on sale of trading securities

Homework Answers

Answer #1

As per policy only first four questions will be answered

1. Answer is option C Consolidated statement of comprehensive income

According to US GAAP, and 'Consolidated statement of recognized income and expenses’ is known as Consolidated statement of comprehensive income

2. Answer is option A Indirect method

Air France-KLM uses for the Statement of Cash Flows is indirect method because net cash flow from operating activities is calculated by making adjustments to net income.

3. Answer is option A No convertible debts

No outstanding common stock for both basis EPS and Diluted EPS is same.

4. Answer is option C Equity method

Equity method is used to account for investments in companies over which Air France-KLM can ‘exercise significant influence on financial and operating policy decisions

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Read the 2015 annual report of Air France – KLM and answer the 20 questions asked...
Read the 2015 annual report of Air France – KLM and answer the 20 questions asked regarding the accounting issues. Link is provided below: http://www.airfranceklm.com/sites/default/files/publications/afkl_registration_doc_2015.pdf 1. Air France-KLM reports ‘Consolidated statement of recognized income and expenses’ for the year ended December 31, 2015. If this statement was a U.S. GAAP statement, what would be the title of this statement? a. Consolidated statement of total net income b. Consolidated statement of other comprehensive income c. Consolidated statement of comprehensive income d....
Read the 2015 annual report of Air France – KLM and answer the 20 questions asked...
Read the 2015 annual report of Air France – KLM and answer the 20 questions asked regarding the accounting issues. Link is provided below: http://www.airfranceklm.com/sites/default/files/publications/afkl_registration_doc_2015.pdf 17. Which of the following is not true about accounting treatment for the overhaul cost of major airframe and engine? a. The cost is treated as separate asset component. b. The cost is capitalized. c. The cost is depreciated over the remaining useful life. d. The cost is expensed as incurred. 18. How are financial...
In the following paragraph Is FCA accounting for its equity investments in a way that is...
In the following paragraph Is FCA accounting for its equity investments in a way that is consistent with U.S. GAAP? explain... FCA Interests in other companies are measured at fair value. Investments in equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are recognized at cost. For investments classified as available-for-sale, financial assets gains or losses arising from changes in fair value are recognized in Other comprehensive...
On August 1, 2015, KLM acquired 45% of Investee Company and is the largest shareholder of...
On August 1, 2015, KLM acquired 45% of Investee Company and is the largest shareholder of Investee Company. During 2015, Investee reported net income of $86,000. On December 1, 2015, Investee Company declared and paid $8,000 in dividends. At December 31, 2015, the market value of the stock was $3,000 lower than the purchase price. In 2015, there was no beginning balance in the SFVA account. KLM mistakenly recorded the transactions using the fair market value method, instead of using...
3. Match the items in Column I with those in Column II Column I Answers Column...
3. Match the items in Column I with those in Column II Column I Answers Column II A-Unrealized holding gains and losses from Available for Sale Securities A liability B- Contra Asset Applies to financial statements of nongovernmental entities C- ASC 825-10-05-5 Recognized in Income from Continuing Operations D- FASB Accounting Standards Codification Allowance for Doubtful Accounts E- Unrealized holding gains and losses from Trading Securities Fair Value Option F- Unearned Revenue Recognized as a Component of Other Comprehensive Income
use the following information to answer the next __3__ questions. Jefferson Equipment Inc. finished the year...
use the following information to answer the next __3__ questions. Jefferson Equipment Inc. finished the year 2016 with gains and losses on its investment assets as follows. Realized Gains (Losses)on actual sales Unrealized Holding on actual sales Gains (Losses) Investment in Trading securities $14,000 $6,000 Investment in Available for sale securities $ (8,500) $1,500 14. How much net Gain or Loss will Jefferson include in net income on its income statement for 2016? a. $13,000 b. $11,500 c. $5,500 d....
Comparing an income statement ratio like net profit margin against industry rivals would be an example...
Comparing an income statement ratio like net profit margin against industry rivals would be an example of: Cross-sectional analysis. Common-size analysis. Time-series analysis. Which of the following is least likely to be classified as other comprehensive income under U.S. GAAP? Changes in the value of long-lived assets that are measured using the revaluation model Unrealized holding gains and losses on available-for-sale securities Minimum pension liability adjustments A company’s other comprehensive income most likely includes: Unrealized gains and losses from cash...
Assume you are an auditor, and your client is a public company with a large portfolio...
Assume you are an auditor, and your client is a public company with a large portfolio of available-for-sale equity securities. The client reports these securities at fair value, with unrealized gains and losses recognized in “other comprehensive income,” an equity account, each period. The client is preparing its quarterly financial statements and is again, for the second consecutive quarter, recording a decline in market value for several of the securities. These securities’ fair values are now below their cost. From...
***PLEASE ANSWER ALL QUESTIONS** 3. On October 28, 2021, a company committed to a plan to...
***PLEASE ANSWER ALL QUESTIONS** 3. On October 28, 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively....
***PLEASE ANSWER ALL QUESTIONS** 3. On October 28, 2021, a company committed to a plan to...
***PLEASE ANSWER ALL QUESTIONS** 3. On October 28, 2021, a company committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $2,000,000. The division's book value and fair value less cost to sell on December 31 were $3,000,000 and $2,500,000, respectively....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT