FAR 5 Flashcards
What is in Current Assets
- Cash and cash equiv
- Trading Securities
- Receivables at NRV
- Inventories at LCM
- Prepaid expenses - insurance and rent
What is captured inside Receivables
- Receivables that are tax refunds
- Receivables that are over payments to creditors
- A/R - which are net of Allowance for bad debt
- current portion of installments receivable
- current portion of notes receivable
What is captured in Non Current Assets on the B/S
- Equity method securities (nonmarketable securities)
- Long Term investments (HTM, AFS)
- PPE (fixed assets less acc deeper.)
- Intangible assets (net of amortization)
- Other assets
What is captured in Other Asset on the B/S
- deposits
- Noncurrent Receivables (including concurrent portions of installments receivables and notes receivables)
- Noncurrent Deferred Tax Asset
- Equipment to be disposed of
What is captured in current Liabilities on the B/S
- Short term notes payable
- Accounts Payable
- Accrued expenses
- Estimated current Liabilities ( warranty expenses)
- Taxes payable ( income taxes payable, collected sales tax, withheld payroll tax)
- Dividends Payable
- Current portion of long term Debt
What are examples of accrued expenses
- salaries payable
- wages payable
- interest payable
- utilities payable
What are examples of taxes payable
- income tax payable
- collect sales taxes
- withheld payroll tax
What are examples of unearned revenue
- rents collected in advance
- fees collected in advance
What are examples of current portion of long term debt
- non current portions of capital lease obligations
- Notes payable
- Loan payables
What is captured inside non-current liabilities
- Notes payable ( net of current portion)
- Noncurrent deferred tax liability
- Deferred Tax Liability
- Other concurrent Liabilities (concurrent portions of capital lease obligations and warranty obligations)
What are examples of Other concurrent liabilities
- noncurrent portion of capital lease obligations and warranties
What is Captured in Stock Holder’s equity Section of the Balance Sheet
Contributed Capital (APIC)
- Preferred Stock - Common Stock ( net of Treasury Stock at par) - Additional Paid In Capital
Noncontrolling interest
Earned Capital
- Retained Earnings (appropriated and unappropriated) - AOCI (DENT)
Subtract (-) Treasury Stock at Cost
How do you calculate tax rate
Earnings (-) Expenses = income
income * tax rate = tax expense
Example earnings of $6680 - expenses of $5180 = 1,500 = income
1,500 * 30% = 450 = tax
if you have prepaid taxes of 500 then 450 would be reclassified as income tax expense and 50 would stay as a prepaid asset
When are bonds payable a current liability
They are current when they are due in a year ( reclassified ) and they are net of the bond discount
Example 32K - 2K discount =30K
How do you calculate Retained Earnings
Net Income = Total Earnings - Total costs and expense
Then you calculate and subtract tax = net income
Net income is then added to unappropriated RE and Appropriated RE
Earnings - 6,680 costs and expenses - 5180 6680 - 5180 = 1500 Unappropriated RE = 900 Appropriated RE = 160
Total RE = 1500 + 900 + 160 = 2110
