F5 Flashcards
Jewelry Unlimited sells a $10,000 bracelet and collects 7 % sales tax; prepare journal entries
Dr. Cash 10,700
Cr. Sales Revenue 10,000
Cr. Sales Tax Payable 700
Payroll Journal Entries
Weekly Payroll Dr. Salaries & wages expense Cr. FICA Cr. Withholding payable Cr. Cash
Employer tax expense
Dr. Payroll expense
Cr. FICA
Dr. Unemployment
Bonus Method
B = 10%[100,000 - 40%(100,000 - Bonus)]
Criteria for post-employee benefits
- rights to receive compensation is based on services already rendered
- obligation relates to rights that vest or accumulate
- payment for compensation is probable
- amount can reasonably be estimated
Criteria for recognizing liability associated with exit & disposal activities
- obligating event occurred
- event results in a present obligation to transfer assets or provide services in the future
- entity has little or no discretion to avoid the future transfer of assets or providing of services
Loss contingency when given a range with no better estimate
Accrue the minimum amount and disclose a note for the difference between the minimum and max
Premiums - coupon shit
Total number of coupons issued multiplied by the estimated redemption rate equals total estimated coupon redemptions
When should you record warranty costs?
At the date of sale
What is the contingent liability for a discounted note receivable?
Its maturity value
How to calculate estimated warranty liability
Estimated warranty cost minus actual warranty costs
How to calculate interest revenue
Total payments minus present value of principle
How to calculate annual payments for interest problems
Face amount divided present value factor of ordinary annuity at face value %
Question that has a face value and a discounted amount
For note receivable use face value and its % and for income from loan use the discounted amount and its %
Discounting note with straight line deprecation
First you multiply the face amount by the discount percentage. Then you subtract that from the face amount. Then you amortize discount amount based on issue date and add back
Asset retirement obligation(ARO) formula
- multiply the estimated payment by present value of 1
- multiply present value by %(risk adjusted rate)
- divide present value by useful life
ARO journal entires
To record ARO
Dr. Asset retirement cost -PV of 1
Cr. Asset retirement obligation
Accretion and depreciation expense Dr. Accretion expense Cr. Asset retirement obligation Dr. Depreciation expense Cr. Accumulated depreciation
To record dismantling
Dr. Asset retirement obligation
Dr. Dismantling expense
Cr. Cash/Accounts Payable
Exit or disposal activities
- involuntary employee termination
- costs to terminate a contract that is not a lease
- coasts associated with exit or disposal activities, including costs to consolidate facilities or relocate employees
Interest receivable journal entries
Dr. Note receivable
Dr. Interest receivable
Cr. Revenue
What equals note receivable at any time?
Present value of remaining monthly payments equals note receivable - FACE VALUE SHIT
Interest revenue earning with discount
Present value of payments divided by payment times discount rate
How to solve discount problems
- Multiply face value by discount rate and subtract from face value
- multiply discount total by discount amortization and add to the above
Bond Discount
Market rate is higher than the stated rate
Bond Premium
Market rate is less than the stated rate
Price of bond when issued
Sum of present value of the future principle payment plus present value of future interest payments
