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CPA- FAR > F7 > Flashcards

F7 Flashcards

1
Q

What are the 5 parts of Stockholders’ Equity?

A

Capital Stock, APIC, RE, AOCI, T/S

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2
Q

What is included in Capital Stock?

A

Par value. Authorized, issued, and outstanding. Common Stock. Preferred Stock

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3
Q

How do you calculate common stock?

A

Total SE – P/S outstanding (@ greater of call price or par value) – Cumulative P/S div in arrears = Common SE

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4
Q

How do you calculate BV per common share?

A

BV per common share = Common SE / CS outstanding

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5
Q

What is APIC?

A

Contributed capital in excess of par, sale of T/S @ gain, quasi-reorg, issue liquidating div, conversion of bond, declaration of small stock div

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6
Q

How do you calculate the change in RE?

A

NI – div declared +/- prior rd adj +/- retrospective accounting change + adj from quasi-reorg = change in RE

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7
Q

How do you classify RE?

A

unappropriated or appropriated for …

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8
Q

What is a quasi-reorganization?

A

accounting adjustment, not a legal reorg. Purpose = to restate overvalued A to lower FV (reduce future dep) and eliminate RE deficit

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9
Q

What is treasury stock?

A

T/S is a debit. Reduces SE. Reacquire/repurchase of stock.

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10
Q

What are the methods to value T/S?

A

cost (most common) or par

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11
Q

What is the cost method for valuing T/S?

A

Record/carry T/S @ reacquisition cost. G/L in APIC when reissued or retired.

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12
Q

What is the par method for valuing T/S?

A

Record/carry T/S @ par value G/L in APIC when reacquired.

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13
Q

What are the dates for dividends?

A

date of declaration, record, and payment

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14
Q

What is a small stock dividend?

A

Small < 20-25%… reduce RE by FMV stock

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15
Q

What is a large stock dividend?

A

Large > 20-25%… reduce RE by par value stock

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16
Q

What are non-compensatory stock options?

A

GAAP only. No J/E until stock purchased, then regular entry. Most employees are eligible and no discount available.

17
Q

What are compensatory stock options?

A

GAAP & IFRS. The compensation expense is allocated over service period. The fair value is an expense to the issuer.

18
Q

What is the difference between a simple v. complex capital structure?

A

Simple = C/S outstanding only. (Basic EPS only). Complex = securities can be potentially converted to C/S (Basic & Diluted EPS).

19
Q

How do you calculate Basic EPS?

A

Basic EPS = Income available to Common S/H / WACSO

20
Q

What is income available to common S/H?

A

NI – PD (preferred dividends)

21
Q

What is WACSO?

A

WA of CS Outstanding = Beg shares outstanding + shares sold (time weighted) – shares reacquired (time weighted) + stock dividends & splits (retroactive) – reverse stock splits (retroactive)

22
Q

How are complex capital structures determined?

A

must have at least 1: convertible security, warrant or other option, contracts that may be settled in cash/stock, or contingent shares

23
Q

How do you calculate diluted EPS?

A

Diluted EPS = income avail to Common S/H + interest on diluted securities / WACSO assuming all diluted securities converted to C/S

24
Q

Dilutive vs. Antidilutive.

A

Dilutive: avg price > x price. Antidilutive: avg price < x price.

25
Q

What are the 3 sections of the Statement of Cash Flows?

A

Operating Investing Financing

26
Q

What is included in the operating section of the SCF?

A

most WC. Operating Assets = all CA except cash. Operating Liabilities = all non-interest bearing liabilities

27
Q

What is included in the investing section of the SCF?

A

changes in non-current assets

28
Q

What is included in the financing section of the SCF?

A

changes in interest-bearing debt & equity

29
Q

How is CFO calculated in the direct method?

A

CFO = Cash received from customers + interest received – interest paid – cash paid to suppliers & employees + dividends received + sales of trading securities – purchases of trading securities – income taxes paid

30
Q

How do you calculate cash received from customers?

A

Inflow = revenue + decrease A/R – increase unearned revenue

31
Q

How do you calculate cash paid to supplier?

A

Outflow = COGS + increase Inv + decrease A/P

32
Q

How do you calculate cash paid to employees?

A

Outflow = Salaries and wages expense + decrease wages payable

33
Q

How is CFO calculated in the indirect method?

A

CFO = NI + dep & amort (discount) + losses – gains – amort (premium) – equity earnings + decrease OA + increase OL

CPA- FAR (9 decks)

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