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NEW QUESTION: 1
High Plains Tubular Company is a leading manufacturer and distributor of quality steel products used in energy, industrial, and automotive applications worldwide.
The U.S. steel industry has been challenged by competition from foreign producers located primarily in Asia. All of the U.S. producers are experiencing declining margins as labor costs continue to increase. In addition, the U.S. steel mills arc technologically inferior to the foreign competitors. Also, the U.S. producers have significant environmental issues that remain unresolved.
High Plains is not immune from the problems of the industry and is currently in technical default under its bond covenants. The default is a result of the failure to meet certain coverage and turnover ratios. Earlier this year, High Plains and its bondholders entered into an agreement that will allow High Plains time to become compliant with the covenants. If High Plains is not in compliance by year end, the bondholders can immediately accelerate the maturity date of the bonds. In this case. High Plains would have no choice but to file bankruptcy.
High Plains follows U.S. GAAP. For the year ended 2008, High Plains received an unqualified opinion from its independent auditor. However, the auditor's opinion included an explanatory paragraph about High Plains' inability to continue as a going concern in the event its bonds remain in technical default.
At the end of 2008, High Plains' Chief Executive Officer (CEO) and Chief Financial Officer (CFO) filed the necessary certifications required by the Securities and Exchange Commission (SEC).
To get a better understanding of High Plains' financial situation, it is helpful to review High Plains' cash flow statement found in Exhibit 1 and selected financial footnotes found in Exhibit 2.
Exhibit 2: Selected Financial Footnotes
1. During 2008, High Plains' sales increased 27% over 2007. Its sales growth continues to significantly exceed the industry average. Sales are recognized when a firm order is received from the customer, the sales price is fixed and determinable, and collectability is reasonably assured.
2. The cost of inventories is determined using the last-in, first-out (LIFO) method. Had the first-in, first-out method been used, inventories would have been $152 million and $143 million higher as of December
31,2008 and 2007, respectively.
3. Effective January 1, 2008, High Plains changed its depreciation method from the double-declining balance method to the straight-line method in order to be more comparable with the accounting practices of other firms within its industry. The change was not retroactively applied and only affects assets that were acquired on or after January 1,2008.
4. High Plains made the following discretionary expenditures for maintenance and repair of plant and equipment and for advertising and marketing:
5. During the fiscal year ended December 31, 2008, High Plains sold $50 million of its accounts receivable, with recourse, to an unrelated entity. All of the receivables were still outstanding at year end.
6. High Plains conducts some of its operations in facilities leased under noncancelable capital leases.
Certain leases include renewal options with provisions for increased lease payments during the renewal term.
7. High Plains' average net operating assets at the end of 2008 and 2007 was $977.89 million and $642.83 million, respectively.
Does High Plains' accounting treatment of its capital leases and receivable sale lower its earnings quality?
A. Both treatments lower earnings quality.
B. The treatment of the receivables sale lowers earnings quality.
C. The treatment of capital leases lowers earnings quality.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
A capital lease is reported on the balance sheet as an asset and as a liability. In the income statement, the leased asset is depreciated and interest expense is recognized on the liability. Thus, capitalizing a lease enhances earnings quality. An operating lease lowers earnings quality.
The receivable sale, with recourse, lowers earnings quality. The sale is treated as a collection thereby increasing operating cash flow. However, High Plains is still responsible to the buyer in the event the receivables are not ultimately collected. Thus, the receivable sale is a collateralized borrowing arrangement that remains orT-balance-sheet. (Study Session 7, LOS 25.d,f)
NEW QUESTION: 2
회사는 공용 서브넷에서 Windows Server 호스트를 실행하여 관리자 팀이 RDP를 통해 연결하여 개인 서브넷의 호스트 문제를 해결할 수 있도록 구성되었습니다. 호스트는 예약 된 유지 관리 기간 이외의 시간에 항상 사용할 수 있어야하며 릴리스 후 3 일 이내에 최신 운영 체제 업데이트를 받아야 합니다.
최소한의 관리 노력으로 호스트를 관리하려면 어떻게 해야 합니까?
A. AWS OpsWorks Stacks에서 호스트를 실행하십시오. 인스턴스 시작시 Chief 레시피를 사용하여 AMI를 강화하십시오.
AWS Lambda 예약 이벤트를 사용하여 Upgrade Operating System stack 명령을 실행하여 시스템 업데이트를 적용하십시오.
B. AWS WorkSpaces에서 호스트를 실행하십시오. 호스트를 강화하려면 Amazon WorkSpaces Application Manager (WAM)를 사용하십시오. 3 일마다 발생하도록 Windows 자동 업데이트를 구성하십시오.
C. 최소 및 최대 인스턴스 수가 1 인 Auto Scaling 그룹에서 호스트를 실행하십시오. AWS Marketplace에서 강화 된 머신 이미지를 사용하십시오. AWS Systems Manager Patch Manager로 시스템 업데이트를 적용하십시오.
D. 단일 인스턴스 AWS Elastic Beanstalk 환경에서 호스트를 실행하십시오. AWS Marketplace의 강화 된 머신 이미지를 사용하도록 사용자 지정 AMI로 환경을 구성하십시오. AWS Systems Manager Patch Manager로 시스템 업데이트를 적용하십시오.
Answer: D
Explanation:
A: uses beanstalk env. creating a custom ami with option to use ssm.
B. Workspaces do no support windows server
C. there is nothing called hardened machine image in marketplace
D. opsworks command supports only linux
NEW QUESTION: 3
Your Prospect is NOT interested in changing their competitive backup/recovery product. What should you do?
A. Ask about their deduplication ratios and their encryption needs to comply with PCI and HIPAA regulations that require change
B. Ask how long they've owned their software(s) and if they can confidently recover their data as quickly as needed and are ready to handle their growth for next 3 years
C. Offer a Butterfly analysis to help them see their environment including current and future total costs of running backup/recovery.
D. A and C
Answer: C
NEW QUESTION: 4
Which is NOT a valid reason for creating an index?
A. To order the columns of a table in ascending or descending sequence according to values in a row.
B. To enforce constraints such as uniqueness on index keys.
C. To order the rows of a table in ascending or descending sequence according to the values in a column.
D. To allow queries to run more efficiently.
Answer: A
Explanation:
Explanation/Reference:
Explanation: