11 Flashcards
What rate should be used to translate contributed capital in foreign currency?
Contributed capital is translated using the historical exchange rate.
What comprises the cash receipts from operations of a statement of CF?
Cash inflows include: cash receipts from sales of goods or services, including receipts from collection or sale of accounts receivable and notes receivable from customers arising from those sales.
What comprises the cash outflows from operations of a statement of CF?
Cash outflows include: cash payments to other suppliers and employees for other goods or services and cash payments to lenders and other creditors for interest.
How should the declaration of a small stock be recorded?
The declaration of a’small’ stock dividend (i.e., less than 20-25% of the number of common shares outstanding) should be recorded by capitalizing a portion of retained earnings equal to the fair value of the shares to be issued. Fluctuations in the fair value of the shares between the declaration date and the issuance date are not recorded. The amount credited to Additional Paid-in-Capital is the excess of the fair market value of the stock over its par value, since Common Stock is credited for par value.
Instead of the usual cash dividend, Evie Corp. declared and distributed a property dividend from its overstocked merchandise. The excess of the merchandise’s carrying amount over its market value should be
Reported as a reduction in income from continuing operations. In this case the excess of BV over FMV would decrease income and retained earnings would be reduced by the dividend payment and loss in property sale.
How much unrestricted current funds revenues from tuition and fees should be reported?
Tuition and fees are recorded at standard established rates, with amounts waived (such as scholarships or tuition remissions) recorded as expenditures. Actual refunds of tuition or fees, however, should be recorded as a reduction of revenues.
Gains from remeasuring a foreign subsidiary’s financial statements from the local currency, which is not the functional currency, into the parent company’s currency should be reported as a(an)
If an entity does not maintain its books in its functional currency, remeasuring into the functional currency is required prior to translation into the reporting currency (i.e., the parent company’s currency). Exchange gains and losses that result for the remeasuring process are recognized in income from continuing operations.
the purchase of inventory includes the following:
Price paid for inventory, freight in, and normal spoilage.
Formula to calculate inventory at lower of cost or market (under US GAAP):
Choose lower of cost, or market (need choose the middle value of replacement cost, NRV, and NRV- normal profit margin)
Formula to calculate inventory at lower of cost or market (under IFRS):
Lower of cost of NRV
Any dividend that does not come out of retained earnings is a reduction of:
corporate paid-in capital and, to that extent, is a liquidating dividend.
Diluted EPS formula:
Calculating diluted earnings per share (EPS) is a two-step process. The first step is to compute basic EPS and the second is to determine the per share effect of each dilutive security. Basic EPS is computed by dividing income available to shareholders (IAC) by the weighted average number of shares outstanding during the period.
What is the contribution called for by the defined contribution plan for the period in which the individual renders services.
The net pension cost
What does the GASB mission include?:
The GASB’s mission includes research and development of standards that will improve accounting and financial reporting for state and local governments. The GASB’s mission includes providing a framework to educate users and support public policies, investments, and management by those users
