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    Information provided by accounting systems

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    Tree Top Airlines began as a small commuter line * years ago but has grown into the seventh largest airline in America, with a strong regional route system. In addition, it has many routes to America's commercial centers and a few selected international routes. Tree Top has a fleet of 350 planes and approximately 7,000 employees, who (by company policy) must all be stockholders. The company grew rapidly after airline deregulation using a clever combination of long-term financing from banks and leasing companies and is now the largest employer in its home state. Its stock is widely traded on the American stock Exchange. In light of the company's rapid growth, the controller is performing a detailed complete reevaluation of the firm's accounting information system. While the system has been updated and improved constantly through the years, the controller is concerned whether it is providing useful information to the appropriate parties.

    A) Identify the parties that have an economic interest in Tree Top Airlines.

    B) For each party, identify the type of information that should be provided by Tree Top's accounting information system.

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    Solution Preview

    A) Identify the parties that have an economic interest in Tree Top Airlines.

    Stockholders
    Banks
    Leasing Companies
    Employees

    B) For each party, identify the type of information that should be provided by Tree Top's accounting information system.

    The employees are stockholders, hence their information requirements are clubbed with Stockholders. Both the banks and leasing companies are interested in the cash flow of the company to see whether ...

    Solution Summary

    The solution identifies payers that have an economic interest. The long-term financing from banks and leasing companies are provided.

    $2.19

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