FAR Rereview Concepts 3 Flashcards
Grid Corp. buys back its own shares using the cost method of treasury stock accounting.
The price they pay to buy back the shares is higher than the par value and original issue price, but lower than the book value of the shares.
How would this affect
Stockholders equity
Book value per share
Stockholder equity: Decreases
Book value per share: Increases
How would you Calculate the Interest revenue if Cap corp reported
Accrued Investment interest Receivable:
1/1/y1 $38,000
12/31y1 $46,500
Accounting Changes and Error Corrections:
What would be the necessary actions for
Change in Accounting Principle
Correction of an Error
Change in Entity
Change in Accounting Estimate
Change in Deprecation method
How should gains and losses from the changes in FAIR VALUE of the following types of foreign currency transaction hedges be reported in the financial statements?
Fair Value
Net Investment
How would a 5% stock dividend affect APIC and RE?
What would be the JE
For small declaration:
APIC: Increase
RE: Decrease
Large declaration 20-25%:
APIC: No effect
RE: Decrease
Cash Dividends:
APIC: No effect
RE: Decrease
Foreign EXCHANGE! WE MUST MASTER
Any situation in which the euro depreciates versus the yen will cause the European company to book a loss.
How would you calculate the depreciation for the update of useful life in years?
After 4 years.
Useful life: Should be 10 rather than 12
Effect on COGS, Ending Inventory, Net income
FIFO Vs LIFO.
Bonus:
Specific Identification method: Typical use?
Weighted average: Typically used for?
Moving average: When is it averaged?
Vested: Does the employee have a permanent right to the vacation days even if they leave the company?
Accumulate: Does the employee continue to earn and carry forward vacation days?
What should be reported as current maturities for long term debt?
What does current maturities of long-term debt mean?
Current maturities of long-term debt are current liabilities
13,000
What type of inventory system and method of estimating ending inventory does a company use when preparing interim financial statements based on prior periods’ financial data?
What does credit terms 2/15, n/40 mean?
How would you calculate the following?
2/15: 2% discount if payment is made within 15 days.
n/40: Full payment due in 40 days if no discount is taken.
What is the Cost method JE’s for treasury stock?
What is the Par method JE’s for treasury stock?
