FORMULAS

Question 1

INVENTORY TURNOVER

Answer 1

COGS / Ave Inv.

Question 2

RATE OF RETURN (on Assets)

hint: ‘return’ = net inc

Answer 2

NI / Ave Assets

RR = NI/AA

Question 3

Days Sales in Average Receivables

Answer 3

360 / Receivables Turnover Ratio

Question 4

Receivables Turnover Ratio

Answer 4

Net Credit Sales / Ave. Receivables

Question 5

GROSS MARGIN PERCENTAGE

Answer 5

Rev. - Cogs / Rev

Question 6

QUICK RATIO

Answer 6

QA / CL (Quick A: liquid w/in 3 mos =
Cash
Mktble securities
Net A/R

Question 7

How soon must a Lg Accelerated Filer submit their 10-Q to the SEC?

Answer 7

40 days – Large Accelerated Filers must submit these quarterly reports 40 days after the end of the fiscal quarter.

Question 8

Intraperiod income tax allocation

Answer 8

Applied to Extraordinary Items, Income from Continuing Operations, Discontinued operations, Cumulative effects of a change in Acctg Principle when applicable, and components of OCI. It is NOT applied to Operating income separately since Operating income is part of the above categories.

Question 9

DEBT TO EQUITY RATIO

Answer 9

Total Liabilities / Total Equity

Liability = Assets - Equity
Equity = Assets - Liability

Question 10

Presenting tax liability in Personal Statement of Financial Condition - Calculated Unrealized Gain (Appreciated Assets)

Answer 10

A provision for est. income taxes is presented for the calculated unrealized gain on appreciated asset values between Liabilities and Net Worth on Personal Statement of Financial Condition.

Question 11

Presenting tax liability in Personal Statement of Financial Condition - tax on income earned.

Answer 11

Provision for tax on income earned to date would be presented with the Liabilities.

Question 12

Dollar Value Lifo - Formula for Index

Answer 12

EI CY / EI BY

Ending Inventory current year /
Ending Inventory base year

Question 13

SYD Depreciation (Sum of Years’ Digits)

Answer 13

Cost - Salvage x [Remain. yrs / SYD]
or
Cost - Salvage x [Remain. yrs. life / T(T+1) / 2]
*T = Total yrs. useful life

Question 14

UNITS of PRODUCTION

Answer 14

Cost - Salv.x [Hrs/Un. this yr / Total hrs/units]

Question 15

Step 1 - Is their an IMPAIRMENT LOSS? goodwill impairment testing)

Answer 15

Step 1: Is CV less than FV? If yes, loss exists

Question 16

Step 2 - Determine IMPAIRMENT LOSS

Answer 16

Step 2: Difference between CV & FV

GAAP - Once written down, cannot be written up.
IFRS - OK to write it up or down.

Question 17

ARE INTANGIBLES AMORTIZED?

Answer 17

If INDEFINITE life - No (impairment testing annual)

IF DEFINITE life - Yes (amortized over useful life)

Question 18

Ending A/R is equal to…

Answer 18

CREDIT SALES
Less Collections
Less Write offs
= Ending A/R (before allowance)

Question 19

IFRS Vocabulary re. Receivables

Answer 19

GAAP: Allowance
IFRS: ‘Provision for’

Question 20

CV of a bond

Answer 20

Face value +/- premium or discount

Question 21

Formula Effective Interest Method

Answer 21

Face - disc/+prem = CV x EffRate = Int Exp - Int pmt (cash pd) = Amortized disc/prem

Question 22

BEGINNING CV or PV of PROCEEDS from issuance of Bonds

Answer 22

1. PV of FACE = (Face x PV lump sum x Eff Rate) +

2. PV of INT = (Face x Stated Int Rate x Time = Interest), then, (INT x PV-OA at EFF Rate)

Question 23

STATED RATE

Answer 23

INT PMT / FACE VALUE ( x 2 if semi annual)

Question 24

EFFECTIVE RATE

Answer 24

INT EXP / C V ( x 2 if semi annual)

Question 25

INTEREST PAYMENT (Bond)

Answer 25

FACE x STATED RATE x TIME (always the same)

Question 26

INTEREST EXPENSE (Bond)

Answer 26

CV x EFF. RATE x TIME (changes each period)

Question 27

How calculate UNAMORTIZED PREMIUM

Answer 27

DIFF BETWEEN CV AND FV

CV - FV = DISC or PREM

Question 28

How det. AMORTIZATION of PREMIUM or DISCOUNT

Answer 28

INTEREST EXPENSE - CASH INT. PMT = amort of prem/disc