accruals%20accounting--AMR%20cashflow%20accruals

accruals%20accounting--AMR%20cashflow%20accruals - ACY3111...

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ACY3111 Zhang Understanding the Accruals Accounting AMR Corporation (American Airlines) Cash Flows versus Accruals This case requires the analysis of AMR Corporation's accrual accounting. Use the balance sheet and income statement from AMR Corporation's December 31, 1999 annual report to answer the following questions. AMR owns and operates American Airlines. Please work with your assigned group. Required: 1. Compute the cash paid to employees for salaries and wages during 1999. (Assume expenses related to "benefits" were zero.) 2. Compute the cash paid to employees for salaries, wages, and benefits during 1999. (Assume all benefits are "Postretirement benefits") 3. Compute the cash received from air passengers during fiscal 1999. 4. Compute the cash received from air passengers during fiscal 1999 if all air passengers pay in advance of flying. 5. In general, for any enterprise, when should revenue be recognized under Generally Accepted Accounting Principles (GAAP)? How closely does AMR's passenger revenue recognition policy conform to this standard? 6. It has been argued that the increasing practice of selling non-refundable tickets should change airline revenue recognition policies to the date of sale. Suppose that all AMR’s air passengers pay cash in advance of flying and 40% of these ticket sales are sold on a non- refundable basis. If AMR is allowed to recognize all non-refundable ticket sales as passenger revenues at the point of sale, restate the following items under this alternative revenue recognition technique for fiscal year 1999: (a) Pretax Income (b) Assets (c) Liabilities (d) Equity (e) Cash Flow from Operating Activities
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A M R C O R P O R A T I O N A N N U A L R E P O R T 1 9 9 9 FINANCIALS CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31,
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This note was uploaded on 02/04/2012 for the course ACCT 3111 taught by Professor Zhang during the Spring '11 term at CUHK.

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accruals%20accounting--AMR%20cashflow%20accruals - ACY3111...

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