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FAR > F8 > Flashcards

F8 Flashcards

1
Q

Diluted EPS=If Basic EPS’ll go down

(Income for common shareholders +Interest saved)/WASCO if all diluted securities were converted

A

Savings to numerator:

  • Options/Warrant-nothing to save. Use Treasury method. Reduce # of shares bought for proceeds/Mkt Price
  • Convertible bonds. Save on interest expense (add back net of tax interest*(1-Tax) plus discount. Use if converted method. Earliest convertible date
  • Convertible preferred stock. Save on dividends. Add back 100% of saved dividends. Use if converted method. DIVIDENDS ARE NOT TAX DEDUCTABLE. IGNORE TAX RATE.
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2
Q

Diluted EPS.

A

Denominator:
Diluted if:
*Options Strike Price

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3
Q

If Antidilutive Securities (increase basic EPS) or option is out of the money

A

Ignore, Do not include in EPS calculation

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4
Q

Basic EPS

A

Always take into account Cumulative Preferred Stock Dividends even if it was not declared

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5
Q

Basic EPS if Stock dividends given

A

Stock dividends apply to all manupulations with stock except buying back (TS). Calculate wacso without dividend coefficient, then* 1.05 if 5% dividends minus treasury stock

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6
Q

EPS for comparative FS

A

If stock split happen in 2nd year, 1st year stock needs to be adjusted to split s well for comparison

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7
Q

Stock split and Dividends

A

Apply to the beginning of the year or even beginning of prior year if comparative FS

Multiply all changes to split/dividend stock %, e.g. Treasury stock sold

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8
Q

Statement of cash flow

A

Operating – This section displays the cash effects of the line items that make up the calculation of net income.
Investing – This section displays the cash effects of non-current asset transactions, such as purchases and sales of fixed assets and investments and lending activities.
Financing – This section displays the cash effects of borrowing, or paying back debt, and buying or selling the equity of the company.

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9
Q

Gain from sale of using equipment in cash flow statement

A

Reported as deduction from bet income from operating activities

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10
Q

Difference GAAP vs IFRS

A

GAAP-operating. IFRS-Investing:
Interest Received
Dividends Received

GAAP-operating. IFRS-Financing:
Interest Paid

GAAP-financing, IFRS operating or financing: Dividends paid

GAAP-Operating. IFRS-Operating, Inv or Financing depending of activities
Taxes Paid

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11
Q

Direct method. Ignore Net Income, Depritiatin, G/L

  1. Cash received form customers. Inflow.
A

Revenue
(-Increase in AR + Decrease in AR) change
(+Increase in unearned rev-Decrease in unearned revenue)

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12
Q
  1. Cash Paid to suppliers and employees:
A

COGS
+Increase in inventory (buying outflow) more money spend
-Decrease in inventory (selling inflow)
-Increase in AP (borrowing inflow)
+Decrease in AP (payment)
+Increase in Allowance for uncollectable accounts (reduce AR contra Asset account)

Salaries and Wages Expense
-Increase in wages payable +/-Change in Wages Payable
+Decrease in wages payable (Payroll)

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13
Q

Direct method

A 
\+Interest/Dividends received
\+Trading securities sold
\+Insurance proceeds
-Interest paid (decrease cash)
-Income Tax paid (decrease cash)
-Cash paid to buy trading securities (decrease)

Other Operating Expenses
-Decrease in Prepaid Exp +Increase in Prepaid Expense
+Decrease in Accrued Liabilities -Increase in Accrued Liabilities

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14
Q

Indirect method

DO NOT DOUBLE COUNT:
Dividends received (already in net income)
Gain/Loss on sale of Trading securities if Cash from Trading securities given

A 
Net Income
\+Depreciation/Amortization
\+Loses
-Gains
-Amortization of Bonds Premium
-Equity Earnings
\+/- Change in OA(except cash/cash equialent)
\+/- Change in OL (Payables) except interest bearing: notes, bonds.
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15
Q

Operating Cash Flow

A 
Trading securities
Interest income
Interest Expense
Dividends received
Gain/Loss on sale of used equipment
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16
Q

Investing Cash Flow

A

Purchasing/Selling PPE

Purchase of somebody’s stock, Long term, nontrading securities

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17
Q

Financing Cash Flow (own debt)

A

Loans,
Paying Principal on Debt
Issuing Stock/Repurchasing Stock
Paying Dividends

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18
Q

No Net cash flow. Disclosure in Supplemental info

A

Depreciation
Increase in Lease Payable-just disclose (no cash)
Record income of equity method

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19
Q

Operating Cash Flow

A

Net Income
+Plus AR (got no cash)
-Minus AP (saved cash)
*IFRS -Paid Dividends

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20
Q

Disclose in Supplementary info if

A

PPE was purchased in exchange of stock=# of stock* FV of stock

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21
Q

Operating CF under direct method

Cash received from customers - minus Cash paid to Suppliers- Other Cash Payments (Income Tax Paid, Interest Paid)

Beginning Cash + Change in Cash=Ending CASH

do not include any gain in direct
Income Tax Payment=Earning Before Tax-Net Income= Income Tax Expense-increase in Interest Expense Payable

A
  1. Cash received
    Revenue
    +Decrease in AR
    +Dividends received
  2. Cash Paid to suppliers
    COGS
    -Decrease inventory
    -Increase AP
  3. Other
    - Interest paid
    - Taxes Paid
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22
Q

Cash Received under direct method

A

Revenue
-Increase in AR
+Increase Unearned Rev
+Sale of trading securities

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23
Q

A change in a debit balance account has the OPPOSITE effect on the net balance of cash.
• A change in a credit balance account has the SAME effect on the net balance of cash.

A

Calculating change in OA/ OL

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24
Q

Fundraising expenses in NFP

A

Classified as supporting activities

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25
Q

Support services

A

Fundraising, administration, management, and membership development

26
Q

Program cost=Mission of organization

A

Salaries of staff

27
Q

NFP

A

All expenses reported as decrease in assets without restrictions

28
Q

Board designated amounts. Ignore board’s decision.

A

It is a class within without donor restrictions

29
Q

Must be kept intact

A

Forever restriction

30
Q

Gift received over next 5 years

A

With donor restriction (time)

31
Q

NFP Cash Flow

A

Operating same as commercial. including interest earned, paid and received dividends
Investing Activities-Insurance

Financing Activities
Cash contribution with donor restriction

32
Q

Fundraising expenses-to encourage contributions. Unsolicited merchandise to encourage contribution.

A

Printing catalog, CPA report- SG&A expense

33
Q

Income, % from donor restricted asset

A

income form donor restricted principal

is also restricted

34
Q

Restricted cash

A

Non current asset

35
Q

Fundraising Expense-Maintain Donor List

A

Soliciting- membership development cost

36
Q

Conditional donation (conditionwl promise,matching) not recognized as revenue. And if received on behalf of 3rd party

A

Refundable advance

37
Q

Conditional pledges and receipts are never recognized as revenue.NO JE REQUIRED

A

Only unconditional, then conditions are met

38
Q

Gifts without donor restrictions

A

Non operating revenues

39
Q

Unconditional pledges received in next years

A

Reported as pledges resevable at PV

40
Q

Total revenue, gains and other support without donor’s restrictions

A

Service revenue
-Minus duplicated revenue, already included
+Plus other revenue
+Net assets released from donor’s restrictions

41
Q

Non profit contribution includes

A

Unconditional, nonreciprocal, voluntary, non ownership of investment

42
Q

Do not include provision for bad debts and bad debt expens

A

In calculating NFP revenue

43
Q

Recognize contribution revenue only if

A

SOME needed (Skills, otherwise needed, may be valued,

44
Q

Interest income in debt securities in NFP

A

Change in FV + interest income

45
Q

The measurement focus of governmental type funds

A

Is on determination of

  • Current financial Resources
  • Financial Position
46
Q

Volunteer recruitment

A

Always fundraising regardless of SOME criteria

47
Q

Three categories of revenue

A
  1. Patient service revenue
  2. Other operating revenue (includes donated supplies)
  3. Non operating revenue (includes donated service)
48
Q

Net patient service revenue

A

Gross- charity care-contractual adj (do not include provision for bad debt, it is an expense)

49
Q

Persuade to remit

A

get cash

50
Q

Board designation doesn’t affect classification on restricted/without restriction by donor

A

Only external donor

51
Q

Income from investment was received

A

Increase in revenue, gain, other support without donor restriction

52
Q

Funds provided for building expansion used to purchase a building

A

Increase in rev, gain, other support (building bought, restriction satisfied)

53
Q

Hospital received investment subject to donor’s requirement that investment income be used to pay for outpatient services

A

Increase in net assets with donor restrictions with possible additional endowment fund disclosures

54
Q

NFP All expenses are recognized as changes to net assets without donor restrictions.

A

Earnings with donor restrictions used in a manner that satisfies the donor’s stipulations are reclassified out of net assets with donor restrictions into net assets without donor restrictions to fund the expense.

55
Q

NFP. Restricted endowment from a donor who stipulated that earnings are to be used for program services. University spend $30K on program from earnings.

A
  1. Expenses without donor restrictions $30K
  2. Net assets without donor restrictions reclassed from restrictions $30K
  3. Net assets with donor restrictions
    Investment earnings $60K
    -Unrealized loss (FV fell)
    -Reclassification of net assets for satisfied donor restrictions $30K
    ___________________________
    Change in net assets with donor restrictions -$70K
56
Q

NFP. Earnings related to cash originally contributed unconditionally. Principle remain intact while earnings must be used to fund construction of the building

A

Net asset class

WITH DONOR RESTRICTION (restriction for purpose)

57
Q

NFP. Conditional promises provided to a not-for-profit organization do not represent a receivable revenue or net assets until the conditions are met.

A

Not classified as net assets

58
Q

NFP. Unconditional promises to pay over a period of time are generally classified as with donor restrictions as to time until collection.

A

With donor restrictions

59
Q

If Board of Governance set aside some money or made other decision

A

Without donor restriction

60
Q

NFP. Beneficiary accounting

A

DR Receivable

CR Contribution Revenue (Contribution, Beneficial interest, change in interest in net assets)

61
Q

NFP. What amount of change in net assets should should be reported?

A

Endowment
+Realized income
+Appreciation
-Expenses

FAR (12 decks)

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