J/E and Formulas Flashcards
Impairment Loss
CV - FV
J/E to adjust to accrual basis sales revenue
DR: AR
CR: SALES
J/E to adj purchases made on a cash basis of accounting not recorded until invoice is paid
And COGS that haven’t been paid for
DR: Inventory
CR: AP
DR: Cost of Sales
CR: AP
J/E for equipment purchased in a cash basis to capitalized under accrual basis
DR: Factory Equipment
CR: Small Tools Expense
DR: Dep Exp
CR: Accum Depreciation
J/E for prepaid insurance policy that was included as an expense under cash basis - to accrual basis
DR: Prepaid Insurance
CR: Admin Expense
J/E for bad debt expense
DR: BDE
CR: Allowance for uncollectible accounts
J/E for Payroll from cash to accrual
DR: Payroll Exp
CR: Accrued Payroll
J/E for Income tax from Cash to accrual
DR: Income Tax Expense
CR: Income tax payable
GP Formula
Sales - Cost of Sales
GP Rate Formula
GP/Sales
Earned GP Formula
Cash Collections X GP%
Deferred GP =
Receivable X GP%
J/E for purchasing a patent
DR: Patents
CR: Cash
J/E for Capitalized R&D equipment
DR: Equipment
CR: Cash
J/E for legal fees for unsuccessful defense of trademark
DR: Legal Expense
CR: Cash
J/E Amortization of patent
DR: Amort Exp
CR: Accumulated amort- patent
J/E for Depreciation of Equipment used currently in R&D
DR: R&D expense
CR: Accum Depreciation
J/E for Trading Securities Unrealized Gain and Loss
Gain:
DR: Valuation acct
CR: Unrealized gain on trading securities
Loss:
DR: Unrealized loss on trading securities
CR: Valuation Account
J/E for AFS Unrealized gain and loss
Gain:
DR: Valuation Acct
CR: Unrealized Gain on AFS
Loss:
DR: Unrealized loss on AFS
CR: Valuation Account
J/E for sale of Security AFS
DR: Cash DR: Valuation Account DR: Realized loss on AFS CR: Unrealized loss on AFS sec CR: AFS sec
J/E for purchase of HTM sec
DR: HTM Sec
CR: Cash
J/E for impairment of HTM sec
DR: Impairment loss
CR: HTM sec
GAAP:
Full Goodwill Calculation
NCI
Full Goodwill Method = FV of sub - FV of subs net assets
NCI = FV of sub X NCI%
IFRS: Partial Goodwill Method:
Goodwill
NCI
Partial Goodwill Method = FV of the sub - FV of subs net assets X ownership %
NCI = FV of subs net assets X NCI%
J/E to eliminate entry in period of the sale estimates the intercompany g/l and adjusts the assets and accum dep to their original balance on date of sale:
DR: Gain on Sale
CR: Accum Dep
CR: Dep Expense
CR: Equipment
J/E intercompany inventory sale elimination
DR: Sales
CR: Inventory
CR: COGS
J/E for to Eliminate Investment in Sub
DR: Common Stock DR: APIC DR: RE CR: Investment in Sub CR: NCI DR: BS adjust to FV DR: Identifiable assets recorded at FV DR: Goodwill or CR: Gain
J/E to record incremental increase in dep
DR: Dep Exp
CR: Accum Dep
J/E to adjustment in goodwill with acquistion
D:R Impairment Expense
CR: Goodwill
J/E to eliminate intercompany transactions associated with IS
The only IS related to intercompany is the payment of dividends by the sub
DR: Dividend income from sub
CR: Dividends paid
J/E for intercompany transactions associated with BS
DR: Intercompany payable
CR: Intercompany receivable
J/E for Nonmonetary Exchanges
DR: New Asset (FV of consideration given)
DR: Accum Depreciation of Asset given up
DR: Cash received
DR: Loss (if any)
CR: Old asset at historical cost
CR: Cash Given
CR: Gain(if any)
SL Depreciation
= (Cost - SV) / N
Double Declining
= 2 X (1/N) X (Cost - Accum Dep)
SYD
= (Cost - SV) X (Remaining life of asset / SYD)
Units of Production
Rate per unit = (Cost - SV) / Est units
Dep Expense = Rate per unit X # of units produced
Formula for BDE and J/E
Beg Allowance - Write offs \+ Recoverables = Allowance b4 adju \+ BDE = Ending Allowance
DR: BDE
CR: Allowance for doubtful accounts
When Calculating Bonds—PV Factor to use
Interest
Principal
Interest = PV of $1
Principal = PV of annuity due or ordinary annuity
Amortization Table:
Interest Payment =
Interest Expense =
Decrease in CV of Bond =
Unamortized Prem =
CV of Bonds =
Interest Payment = Face amount X Stated Rate (If Semi annual Stated Rate/2)
Interest Expense = Beg CV X Mkt Int Rate
Decrease in CV of Bonds (Amortization)= Interest payment - Interest Exp
Umamortized Prem = Previous unamoritzed prem + Decrease in carrying amount
CV of Bonds = Beg CV - Decrease in CV (Amort)
Bond Payable
CV of Debt =
Payment due on call date
Amount of Gain or Loss
CV of debt = FACE + Unamortized prem
Payment due on Call date = Face X Percentage
G/L = CV - Payment due on Call date
Bond issued at a discount
= Stated Rate < Effective Interest Rate
Bond Issued at a premium
= Stated Rate > Effective Interest Rate
J/E for Borrower when the bond is issued at a discount
DR: Cash
DR: Discount on BP
CR: BP
J/E for Borrower when bond is issued at a prem
DR: Cash
CR: Prem
CR: BP
J/E for Common stock when the convertible bonds submitted to conversion
DR: BP
DR: Prem
CR: CS
CR; APIC
J/E Issued bonds with detachable warrants
DR: Cash
DR: Discount
CR: BP
CR: APIC (Stock Warrants)
J/E for Stock Dividend
DR: RE
CR: CS
CR: APIC
J/E for Convertible Bonds
DR: Cash
DR: Bond issue cost
CR: BP
CR: Prem on BP
J/E for Interest Expense on Bonds
J/E for Amort of Bond issue costs
DR: Interest Expense
DR: Prem on BP
CR: Cash
DR: Bond issuance Expense
Cr: Bond Issue Cost
J/E for Conversion of Bonds into CS
DR: BP (Face) DR: Prem on BP CR: CS (# of bonds X # of shares/bond X Par) CR: Bond Issue Cost CR: APIC
PP
Funded Status
FV of plan assets - projected benefit obligation
Net Periodic Pension Cost
SIRAGE
Service Cost
Interest Cost (Beg PBO X Disc Rate)
- Return on Plan Assets ( Beg FV of Plan Assets X Epected rate)
+Amort of Prior Service Cost
- Gain or +Loss
+Amortization of Existing Net Obligation or Net Asset
=Pension Expense
PP J/E
- Contribution to plan
- Service/Interest Cost
- Return on Plan Assets
- Amort of Prior Service cost
- Gain (in current period)
- DR: Pension Benefit Asset
CR: Cash - DR: Net Periodic pension cost
CR: Pension benefit asset
DR: Deferred Tax Asset
CR: Deferred Tax Benefit - IS - DR: Pension benefit asset
CR: Net periodic pension cost
DR: Deferred Tax Expense
CR: Def Tax Liability - DR: Net Periodic Pension Cost
CR: OCI
DR: Deferred Tax Benefit -OCI
CR: Deferred tax benefit - IS - DR: Pension Benefit Asset
CR: OCI
DR: Deferred Tax Expense – OCI
CR: Def Tax Liability
TAX:
What are Installment Sales, Contractors Accounting (% vs. completed) and Equity Method (undistributed dividends)?
FS Income First = Tax Return Income Later
Tax Income Later = Future Tax Liability
TAX:
What are prepaid rent, prepaid interest, prepaid royalties?
Tax Return Income First = FS Income Later
Tax Income First = Prepaid Tax Benefit (asset)
TAX: What are BDE (allowance vs. Direct write off), Est. Liability/Warranty Expense, Start-up expenses?
FS Expense First = Tax REturn Expense Later
Tax Deductible Later = Future Tax Benefit (asset)
TAX: What are Depreciation Expense, Amort of Franchise, and prepaid expenses (cash basis for tax)?
Tax Return expense first = FS expense later
Tax deductible first = Tax liability
DTL
Future tax accounting income > Future Fin accounting income
DTL
Future tax accounting income < future Fin accounting income
J/E to record the taxes (Tax Liability)
DR: Income tax Expense – Current
DR: Income Tax Expense – deferred
CR: Def Tax Liability
CR: Income tax payable
J/E to record taxes (Asset)
DR: Deferred Tax Asset
DR: Income Tax Expense - Current
CR: Income Tax Payable
CR: Income Tax Benefit - Deferred
J/E To record taxes (Asset and Valuation)
DR: Deferred Tax Asset
DR: Income Tax Expense - Current
CR: Deferred tax exp valuation allowance
CR: Income Tax Benefit - Deferred
CR: Income Tax Payable
J/E for Issuance of shares for property
DR: Land
CR: CS
CR: APIC
J/E to purchase TS
DR: TS
CR: Cash
J/E for Property Dividends Distributed (ie inventory)
DR: RE (FV of property)
DR: Loss on Inventory
CR: Inventory
J/E Stock Dividend Issued
DR: RE
CR: CS
J/E for Cash Dividend
DR: RE
CR: Dividend Payable
Unrealized G/L on Marketable Sec classified as AFS
DR: AFS
CR: OCI
Cost Method J/E
- Issue
- Buy Back above issue price
- Reissue above cost
- Reissue below cost
- DR: Cash
CR: CS (#Xpar)
CR: APIC (plug) - DR: TS
CR: Cash - DR: Cash (# X Cost)
CR: TS
CR: APIC - DR: Cash
DR: APIC - TS
DR: RE
CR: TS
Operating
Investing
Financing
Operating = Cash effects of the line items that make up the calculation of NI
Investing = Cash effects of non-current assets transactions, such as purchases and sales of fixed assets and investments and lending activities
Financing = Cash effects of borrowing, or paying back debt, and buying and selling equity of the company
J/E to recognize Compensation expense of stock options
DR: Compensation Expense - stock options
CR: APIC - Stock options
J/E to recognize exercise of stock options
DR: Cash
DR: APIC - Stock options
CR: CS
CR: APIC
J/E to record expiration of stock options
DR: APIC - Stock options
CR: APIC - Expired stock options
J/E for Other Financing Sources (credit)
DR: Cash
CR: Other Financing Sources
J/E to record PO
DR: Encumbrance Control
CR: Budgetary control
J/E Supplies received for govt units
DR: Budgetary Control
CR: Encumbrance Control
DR: Expenditures
CR: Vouchers payable
J/E to record general fund sal and wages
DR: Expenditure control
CR: Vouchers Payable
J/E for Interfund Reves
DR: Due from other funds
CR: Interfund Revs
J/E for inflows from a grant
DR: Deferred inflows
CR: Grant Revenues
J/E for property taxes collected in advance of the fiscal period
DR: Cash
CR: Deferred Inflows of resources
