Gary's Gizmos pays health insurance benefits to employees who retired early. How are these obligations accounted for according to SFAS No. 106?

a.

Other post-employment benefit obligations that are reported only as other comprehensive income

b.

Other post-employment benefit obligations that are liabilities

c.

On a pay-as-you-go basis

d.

Extraordinary items

Generally, the long-term impact of issuing stock options to employees is:

a.

Compensation expense recorded when exercised for the full exercise price

b.

The cost of stock options is recorded directly to retained earnings

c.

Stock options are almost never exercised by employees

d.

Dilution of equity, since compensation expense is usually not recorded

ABC has segment information of:

Net salesOperating ProfitsIdentifiable Assets

Gorks$15.5$1.7$10.3

Borks20.62.113.7

Borks have an operating profit margin (similar to return on sales) of:

a.

11.0%

b.

15.3%

c.

10.2%

d.

2.1%

Marriott had outstanding stock options of 20 million at the end of fiscal year 2001 (outstanding shares were 245 million). Marriott had net income of $236 million and pro forma net income (treating stock options as expenses) of $187 million. This means:

a.

Severe potential dilution of common stock well over 20%.

b.

The company has severe leverage problems because of the option obligations.

c.

The company is obviously near bankruptcy.

d.

The compensation expense associated with stock options reduces earnings over 20% on a pro forma basis.

Hilton's 2001 segment reporting note showed that Hotel Ownership has revenue of $1,886 million, operating income of $474 million, and assets of $4,925 million. Managing and Franchising had revenues of $120 million, operating income of $113 million, and assets of $680 million. This indicates that:

a.

Hotel Ownership had an operating return on sales ratio below 2%, a possible red flag

b.

Hotel Ownership has a higher operating return on sales than Managing & Franchising

c.

Managing & Franchising probably should be sold since the return operating return on sales is extremely low

d.

Managing & Franchising s asset turnover ratio at 17.6% suggests inefficiency when compared to Hotel Ownership

Marriott uses the all-current method for foreign currency translation. The translation adjustment for 2001 was -$14 million (a net loss), and net income was $236 million. The translation adjustment was:

a.

Reported as an extraordinary loss on the income statement

b.

Reported as a loss under income from continuing operations

c.

Reported directing to current liabilities at $14 million

d.

Reported as a negative equity item as an other comprehensive income item

General Electric (GE) had a Prepaid Pension Asset of $12.4 billion, total assets of $495 billion, and net income of $13.7 billion, all for 2001. This means that:

a.

GE had other comprehensive income of $12.4 billion

b.

GE's pension plan was underfunded by $12.4 billion

c.

GE recorded a nonrecurring item on the income statement for $12.4 billion

d.

GE's pension plan was overfunded by $12.4 billion

Any help would be great. Thank you in advance