F7 - Equity, EPS, And Cash Flows Flashcards
How to calculate Earnings Per Share (EPS)
= Net Income (available) - preferred stock dividends / weighted average of the number of common stock outstanding
What are the parts for a Cash Flow?
1 - Operating Activities
2 - Investing Activities
3 - Financing Activities
4 - Net Increase in Cash & Cash Equivalent
When computing diluted earnings per share, convertible securities are:
Recognize only if they are diluted
How to calculate DILUTED earnings per share (convertable bonds)?
Diluted EPS = Adjusted net Income is Income (available) + add interest expense (of convertible bonds) - less tax deduction
*Notes interes is not added back under the if.
converted
/ divided
Weighted average number of Common stock outstanding + add preferred shares + add converted bonds
What is the format of an Cash Flow Statement for Indirect method?
Operating Activities
Net Income
IS
Amortization and depreciation
Bad debt
Gain or loss on sale facility
Collection interest & Dividends
Taxes
BS
Account Receivable
Inventory
Prepaid
Account payable
- interest
- tax
CLAD - Current assets & liability changes - Losses and gain - Amortization & depreciation - Deferred items
Investing Activities - think long term asset
Purchase long-term asset or long-term investment
Selling long-term assets
Financing Activities - think long-term liability and equity
Borrowing Pay principal Issuing common stock Paying Dividends Paying debt on acquisition cost
What is the format of an Cash Flow Statement for Direct method?
Operating Activities Cash collected from customers Interest and Dividends received Cash paid to employees & suppliers Interest and taxes paid Purchase and sales of trading securities
Investing Activities
Purchase long-term asset or long-term investment
Selling long-term assets
Financing Activities Borrowing Pay principal Issuing common stock Paying Dividends Paying debt on acquisition cost
How to calculate basic (and diluted) EPS?
Basic (and diluted) EPS = income available to common shareholders / weighted average number of common stock
1 What Requied Financial for Define Benefit Pension plans?
2 What Requied Financial for Define contribution pension plans?
3 The financial statement required of both defined pension plans and defined contribution pension plans is ?
1= Like BS = Statment of net Asset available for Benefit,
= Like IS = Statement of changes in net assets available for benefits,
= Like BS - Liability = Statement of accumulated plan benefits,
= Like Liabilities changes = Statement of change in accumulated plan benefits
2= statement of change in accumulated plan benefits
Statement of changes in net assets available for benefits
3 = Statement of change in net assets available for benefits
The following fund types are measured in?
GRaSPP
SE
CIPPOE
GRaSPP is measured in current financial resources
SE CIPPOE is measured in Economic Resources
Rule of cumulative preferred stocks dividends
Cumulative preferred stocks dividends are paid on par value of preferred stock and have a preference over common stock Dividends until all past preferred stock is paid.
Computing the weighted average of common stock outstanding WACSO, for basic earnings per share for convertible security dilutive or anti-dilutiv are?
IGNORED
What is dilutive and Anti-dilutive
They are securities
Dilitive is the effect of certain action or activities that reduce EPS
If only average price > strike “exercise” price “IN THE MONEY”
Anti-dilutive refers to activities that maintain or increase EPS and shareholders voting power
When calculating WACSO during or mid-year,
What event occurs when you must calculate the WASCO from the beginning of the year?
1 Stock split
2 Stock Reversed
3 Declared and Distribution of stock dividend
How to calculate Retained Earnings
Net Income/loss
- Dividends ( cash, property and stock) declared
+ or - prior adjustment
+ or - accounting changes report retrospectively
= Retained Earnings RE
\+ Revenue - Expenses = pretax Taxed exp. Net income \+ Beginning RE = Ending RE
In common stock issued, What are the journal entries for
Par Method
Cost Method
When issuing common stock, buy backs and resell
When common stock are issued is the same JE for Par or Cost Method
Dr. Cash
Cr. Common stock
Cr. APIC - C/S. - plug JE
PAR METHOD
Buy-Back
2- Dr. Treasury stock par value
2- Dr. APIC - C/S (at original sold APIC)
3- Dr. ???APIC T/S = ? IF need more (CHECK is ther is CREDIT Bal. Of T/S)
3- Dr. ???Retained Earnings (IF there is no Bal in T/S)
1- Cr. Cash
2- Cr. ???APIC T/S = IF i need credit
Re-Sell Treasury Stock
1- Dr. Cash
2- Cr. Treasury Stock par
3- Cr. APIC-CS
COST METHOD
Buy-Back
2- Dr. Treasury Stock cost
1- Cr. Cash
Re-sell Treasury Stock
1- Dr. Cash
3- Dr. ???APIC T/S = ? IF need more (CHECK is ther is CREDIT Bal. Of T/S)
3- Dr. ???Retained Earnings (IF there is no Bal in T/S)
2- Cr. Treasury Stock at cost
3- Cr. ???APIC T/S = IF i need credit
