Deck 19 Flashcards
Dilutive shares
Avg. price is greater than the exercise price (must use treasury stock method) or Basic EPS > dilutive EPS
Formula to compute additional shares outstanding (Treasury stock method) =
Number of shares issued - ((# of shares x exercise price)/avg. market price))
Anti dilutive shares
Avg. price is less than exercise price (Basic EPS
Cash paid to suppliers =
COGS + increase in inventory - decreases in inv. + decrease in A/P - inc. in A/P
How do increases in current assets and decreases in current liabilities affect cash flow statement?
Uses of cash (decrease)
How do decreases in current assets and increases in current liabilities affect cash flow statement?
Source of cash (Increase)
How does bond discount amortization affect the cash flow statement?
Add back to net income in the operating activities section
Cash paid to purchase common stock should be included where in the statement of cash flows?
Subtraction from investing
The collection of notes receivable (loans) is recorded where in stmt of cash flows?
Investing
Interest received (Stmt of cash flows) - IFRS vs. GAAP
IFRS: operating or investing; Gaap: operating only
Interest paid (stmt of cash flows) - IFRS vs. GAAP
IFRS: operating or financing; GAAP: operating only
Dividends paid (stmt of cash flows) - IFRS vs. GAAP
IFRS: operating or financing; GAAP: financing only
Cash received from customers (direct method) =
Revenues - increase in A/R + decrease in A/R + increase in unearned revenue - decrease in unearned revenue
Gain/loss indirect method only =
Selling price - NBV
Operating cash flows (indirect method)
NI + depreciation expense & amor. + losses - gains - equity earnings +/- change in operating assets and operating liabilities
Investing activities
Change in non current assets (Ex: making loans to other entities, etc.)
Financing activities
Changes in interest bearing debt and equity
Where are capital lease obligations located in stmt of cash flows?
Considered a non cash activity; shown in a separate supplemental disclosure
Where are principal payments located in cash flow statement?
Financing outflow (interest paid is operating)
Journal entry for the retirement of treasury stock (cost method)
Dr. C/S and APIC; Cr. APIC - T/S and Treasury stock (at cost)
Examples of items that must be separately disclosed under indirect method?
Cash paid for income taxes and interest paid (both of these are included in the operating section of the stmt of cash flows)
