main Flashcards
CASH INCOME TO ACCRUAL INCOME
SAME ASSET, FLIP LIA
realized gross profit
(cash received - interest portion ) * gross profit %
where does NCI appear on FS
in the owner equity section
book value per share
common equity / # of common share ousta ;;;; if preff is non-cumu, the equity of preff is the liquidation value, subtract this from total equity to get common stock equity; if preff is cumu, liquidation value of pref is its par value plus premium plus div in arear OR liquidation value + div in arrear
asset turnover ratio
Net sales ÷ Total assets
profit margin %
NI / sales
% return on asset
net income / avg total asset
transfer from Available for sale to held to maturiry
amount recognized in OCI are not reversed. they are amortized into earnings same way as premium or discount
transfer from held to maturity to available for sale
Any unrealized gains or losses that were previously unrecognized are recognized in OCI
if ratio is less than 1, wut cause the increase in the ratio
transaction that result increase in denominator and numerator will improve da ratio
remeasurement ( sub operate in Local curr, but functional curr is US), wut rate to use?
non monetary items BS items and related rev, exp (COGS, depreciation, amortization) use HISTORICAL rate - Round Neo Refused Eyeless HamMonetary and curr items (Allow, rent) use curr rate
fair value hedge
This hedge is a foreign currency fair value hedge because it hedges a foreign currency exposure of an unrecognized firm commitment whose cash flows are fixed
average number of days in the operating cycle
Average days’ sales in inventories + Average days’ sales in accounts receivable
effective portion of a cash flow hedge of a forecasted transaction
is included in accumulated OCI (an equity account to which periodic OCI is closed) until periods in which the forecasted transaction affects earnings.
intrinsic value of an option
The intrinsic value of an option is the difference between the market value of the underlying and the exercise price of the option. The amount paid for the option is not relevant
A gain on a foreign currency receivable and a loss on a foreign currency payable resullt when ?
A gain on a foreign currency receivable and a loss on a foreign currency payable result when the dollar weakens.
translation , wut rate to use ?
Assets and liabilities are translated at the exchange rate at the balance sheet daterevenues, expenses, gains, and losses are usually translated at average rates for the periodSHE is historical rateTasty Cops Ate Hooks
expressing all financial statement items as a percentage of base-year amounts is called
horizontal common size
price to earning ratio
the market price divided by basic earnings per share.
cash paid to interest expense ?
same as indirect CF , flip asset, same lia
AR turnover
net credit sale (after subtract allowance) / avg AR
foward contract
use da future rate at transaction date vs future rate at year end
avg day sale in inventory
365 / inventory turnover
time interest earned ratio
earning b4 interest and tax / interest expense
cash flow hedge ( effective and ineffective)
effective, recog in OCI first, then reclass to earning when done,ineffective, recog in earning immediately
Equal increases in the numerator and denominator of a fraction that exceeds one
decrease da fraction
cash flow hedge
a hedge of the foreign currency exposure of a forecasted transaction
A receivable or payable stated in a foreign currency
should be recorded at the current exchange rate and then adjusted to the current exchange rate at each balance sheet date
a gain or loss on a foreign currency transaction that hedges a net investment in a foreign entity
the translation loss and the transaction gain should be reported in accumulated other comprehensive income.
Journal entry to record subscription for no par common stock with stated value
Dr. Cr.Stock subscriptions receivable XXX Common stock subscribed (for shares subscribed x stated value per share) XX Additional paid-in capital X
entry to eliminate valuation allowance for tax
Valuation allowance 1,200 Tax expense/benefit - deferred 1,200
purchase 3 month treasury bill, wut is it on CF?
it is cash equivalent and has no effect on CF
collection of overdue AR from a customer, CF?
operating
proceeds from a note payable
financing
collection from a note receivvable from a related party
investing cf
a monthly payment to finance the note
are repayment of debt obligation, financing CF
bond redemption amount , CF ?
financing
amortization of bond discount entry , and effect on CF
dr interest exp, cr dis its a noncash item that reduce incomeadd back to operating CFif its a premium, subtracct it
collection from customer equal? on CF
sale minus increase in gross AR , ( flip asset, same lia , same as accrual to cash NI)
interest expense to cash paid for interest ?
interest exp plus increase discount amortization , let say dis count amortization increase by 500, add this ; unamortize discount will decreae by 500, subtract thisinterest exp minus decrease in unamortize discount
cash paid for selling exp ?
same asset, flip lia, selling expense - depreciation allocated to selling expense
cash paid to supplier ?
since cash paid for interest to interest = same as indirect = flip asset, same liathis one is = same asset, flip lia
increase in Investment in Videogold, Inc., stock, all of which was acquired in the previous year, carried on the equity basis , CF ?
subtract from operating
Accumulated depreciation, caused by major repair to projection equipment
should not be expense as it benefit more than one period, non expense , no effect on CF
premium on bond payable ? CF?
subtract from operating CF , if there is a decrease on premium, u add it back
Deferred income tax liability , CF?
treat it just like lia , on operating
If an entity uses the indirect method to present its statement of cash flows, wut to report in supplemental disclosure ?
disclose interest and income tax paid
nonmonetary exchanges be recorded based on fair value wen
if fair value is determinable, unless the exchange transaction lacks commercial substanceThe nonmonetary exchange of assets is measured at the fair value of the new truck received because the fair value of the truck given up is not available. The gain or loss on the exchange is the difference between the fair value of the truck received of $5,000 and the total carrying amount of the assets given up of $5,000 [($10,000 – $7,000) carrying amount of old truck + $2,000 cash paid]. Accordingly, no gain or loss is recognized on this nonmonetary exchange.
depreciation expense in CF when knowing AD?
ending AD - AD sold + begin AD = depreAD sold = cost - carry value
payments to acquire debt instruments of other entities (other than cash equivalents and debt instruments acquired specifically for resale)
investing
not be reported in disclosures related to the statement of cash flows is
item that does not affect recognized assets or liabilities ;;;;;;;;;;;;A stock dividend declared during the year.
conversion of debt to equity . CF ?
disclosure
Nontrade notes payable increase, CF ?
not an operating item
find COGS in CF ?
get COGS + same asset, flip lia , in inventory and trade APsince cash paid to interest is flip asset, same lia
inventory loss recognize in interim
ASB ASC 270-10-45-6 provides that inventory losses from market declines should be recognized in the interim period in which the decline occurs. If these losses are recovered in a later period a gain should be recognized in that period but these gains “should not exceed previously recognized losses.”In regard to the situation described in the question, the dollar amount of inventory would decrease by the amount of price decline in the first quarter and increase by the same amount in the third quarter.
available for sale, cost 50k, sold for 48k, previous unrealized loss of 5k in OCI, final effect?
2k loss in net income, 5k reversal out of OCI , will be gain of 5k in OCI, comprehensive income will be 3k gain
how to report note receivable that are customary trade term?
report them at face amount
period to amortize the intangible asset (copy right)
the useful life of an intangible as the period over which the asset is expected to contribute to future cash flows
defer gross profit
NAME?
received proceeds from insurance from death of officer, wut amount to recog?
the proceeds minus cash surrender value
how to recog legal and consultant cost when issuing stock?
expense
how to recog registration and issuance cost when issuing stocK?
debit AIPC
how to find G/L when u settle ARO?
dont compare the inital ARO vs the settlementgotta find the Expected cash flow adjusted for inflation and market risk , then compare this to settlement to find g/l
when u see incentive stock option on a dilutive EPS question, wut to do ?
check to see if excercise price > market price, IGNOREif excercise price < market price, add the diff to EPS denominator, diff is calculated based on the ( # stock * excercise price) / market price,if Jan-Mar = 15k, April-May 14k, weighted = 153/12 , 142/12
adjuting entry for when there is a gain for future contract
Dr option , Cr unrealized gain
both trade stuffs, have commercial sub, received cash as well, wut to do ?
The cash received by Vey is taken into consideration in determining the fair value of the equipment surrendered, but is not taken into consideration in determining the fair value of the equipment received
Noting that interest rates are declining, Blue Township opted to retire an existing, callable general obligation bond and replace it with a new bond issue with lower interest. A $4,000,000, 5% bond originally issued at par value with 15 years remaining was retired for $4,100,000. A new $4,000,000, 2%, 30-year bond was issued. The new bond issue was sold at 104 and printing, legal, and administrative costs for the transactions amounted to $5,000. On the government-wide financial statements, this refunding would result in:
This “current” refunding used the proceeds of the new debt to repay the old debt in its entirety. For current refundings reported in the government-wide statements, GASB D20.108 states that the difference between the reacquisition price of the old debt and the net carrying amount of the new be amortized over the shorter of the remaining life of the old debt or the life of the new debt, and debt issue costs be deferred. Cash flows for the refunding included outflows of $100,000 for call premium and $5,000 for issuance costs to be amortized over the remaining life of the old bonds, and a $160,000 premium on the new bonds to be amortized for the life of the new bonds. Therefore, for the 15-year remaining life of the retired bond, the difference between the reacquisition price of the old debt and the carrying value of the new debt is being amortized as a component of interest.
Noting that interest rates are declining, Blue Township opted to retire an existing, callable general obligation bond and replace it with a new bond issue with lower interest. A $4,000,000, 5% bond originally issued at par value with 15 years remaining was retired for $4,100,000. A new $4,000,000, 2%, 30-year bond was issued. The new bond issue was sold at 104 and printing, legal, and administrative costs for the transactions amounted to $5,000. On the government-wide financial statements, this refunding would result in
$4,000,000 liability due at maturity in 30 years plus a $105,000 contra liability to be amortized as a component of interest over 15 years, and a $160,000 additional liability to be amortized as a component of interest over 30 years.
how to recog unconditional promise for NFP ?
record unconditional promises to give as contributions revenue when the promise is made at net realizable value, or net of any allowance for uncollectible pledgesbasically recog it in period received at fair value
wut increase net asset of a NFP ?
Investments are initially recorded at fair value if received as a contribution or gift. Unrealized gains on investments carried at fair value also increase net assets. As the investments themselves were an unrestricted gift, the unrealized gain would increase net assets without donor restrictions. Investment income includes dividends that increase net assets without donor restrictions unless there are donor stipulations.
Which of the following disclosures should prospective financial statements include
accounting policies + significant assumptions
pledge AR for a loan to A
A will retain control of receivable and continue to collect the receivable and applies the collection to the loan balance
how to find the cash proceed when issued the bond ?
present value of face @ effective rate + present value of ordinary annuity of payment(stated) @ effective rate
bond with stated rate less than effective rate, cash payment vs interest expense ?
cash will be less than interest expenseInterest expense is Carrying amount × Effective interest rate.Cash payment amount is Face amount × Stated interest rate.In this example, the stated rate is less than the effective rate, so the cash payment is less than the interest expense.
payroll tax lia vs pay roll tax epx
payroll tax lia = withheld amt + employee FICA + employer FICApayroll tax exp = just the employer FICA
compensation stock option plan, process of recog
the additional paid-in capital—stock options account should be reduced at the excercise daterecog exp over service period, Dr compen exp, Cr APIC stock option (increase)when stock excercise, Dr cash (amt employee pay), Dr APIC stock option (reduce it), Cr CS par, CR APIC plug
a large accelerated filer must file its Form 10-Q with the U.S. Securities and Exchange Commission within how many days
40 days
how G/L from discontinue ops reported ? wut about in interim period ?
The gain or loss from the disposal should be reported separately net of income tax effectssame thing for interrim period, not at year end
what account does a CITY close at year end ?
expenditure cuzz its a nominal (operating statement) account used in periodically measuring outflows of financial resourceBS accounts do not close at year end
government fund balance sheet include wut ?
a separate column for each major governmental fund and a column with aggregated information for all other (nonmajor) governmental funds as well as a total column for all governmental funds.
basic financial statement of governmetns
government-wide statement of net position,government-wide statement of activities,governmental funds balance sheet,governmental funds statement of revenues, expenditures, and change in fund balances,proprietary funds statement of net position,proprietary funds statement of revenues, expenses, and changes in fund net position,proprietary funds statement of cash flows,fiduciary funds statement of net position,fiduciary funds statement of changes in fiduciary net position, andnotes to financial statements.
lifo retail method
adjust ending retail inventory back to normal price = divided by 1.10 if 10% price increaseget the ( retail inventory layer from above, cost retail ratio1.10 ) + beginning cost inventory
what 10Q include
The Form 10-Q contains financial statements, a discussion from the management, and a list of “material events” that have occurred with the company.
cash, cash equivalent? cash in bond sinking fund, posted date check, petty cash?
bond sinking fund = not cashposted date check = not cash, its receivablepetty cash = cash
what is factoring receivable ?
Factoring arrangements are a means of discounting accounts receivable on a nonrecourse, notification basis. Accounts receivable are sold outright, usually to a transferee (the factor) that assumes the full risk of collection, without recourse to the transferor in the event of a loss. Debtors are directed to send payments to the transferee. Red Co. will have its cash immediately upon the sale, whereas the other methods may accelerate the receipt of cash but will not result in a great deal of cash being received immediately.
what is depreciable base /
Depreciable base is Purchase price - Salvage value:
When a company is bought, ? goodwill?
purchase cost of stock - Less 30% of identifiable assets (30% of $600,000)
requires that debt issuance costs be presented in the
this is debt issue cost, not equity issuance cost : presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts; the recognition and measurement guidance for debt issuance costs were not affected by the amendments. Amortization of debt issuance costs also shall be reported as interest expense; issue costs will no longer be reported in the balance sheet as deferred charges.
right dividend distribution, then issuer redempted them since no right has been excercise, entry ? effect
initial : memo onlyredem = Dr RE , Cr Cash ;;; reduce SHE
owns 2,000 shares of Arlo, Inc.’s, 20,000 shares of $100 par, 6% cumulative, nonparticipating preferred stock and 1,000 shares (2%) of Arlo’s common stock, Declared and paid 240k for preff in year 2, what is div income ?
since this is culumlative: year 1 = 120 year 2 = 120(120+120)*0.1 = 24k
net periodic pension cost
service + interst cost - Expected return on plan assets + Amortization of prior service costs +- Amortization of unrecognized (gain) loss + Amortization of unrecognized transition obligation
$5,000,000 face value 10-year convertible bonds outstanding on January 1. The bonds were issued four years ago at a discount that is being amortized in the amount of $20,000 per year. The stated rate of interest on the bonds is 9%, and the bonds were issued to yield 10%. Each $1,000 bond is convertible into 20 shares of Chan’s common stock;;;; find interest exp (net of tax) for DEPS numberator
Interest: Cash ($5,000,000 x .09) $450,000 Discount amortization +20,000—————————————————— Tax ($470,000 x .25) (117,500)
option contract to purchase share at specific price + option cost, but did not excercise it until next year, effect at Dec 31?
still recog G/L in earning# share * intial price + option costless # share * end of yer price + option cost
reversal of impairment loss of intangible asset, goodwill and long-lived asset?
is prohibitedlong lived asset held for sale, can be restoredA gain should be recognized for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized for a write-down to fair value less cost to sell.
On January 1, 20X1, Bay Co. acquired a land lease for a 21-year period with no option to renew. The lease required Bay to construct a building in lieu of rent. The building, completed on January 1, 20X2, at a cost of $840,000, will be depreciated using the straight-line method. At the end of the lease, the building’s estimated market value will be $420,000, carry value of building at yr 2?
building is classified as leashold improvement, will be depreciate less of lease term OR life ,840/20 - 840 = 798 CARRY AMOUNT AT YR 2
Technological feasibility is established when
completion of a detailed program design or completion of a working model.
reconcile govern fund to govern WIDE?
ADD Capital asset purchases and payments of long-term debt principalADD internal service fund assets and liabilities SUBTRACT book value of capital assets sold
contribution revenue ?
restricted reg when promised or receivedconditional promise r not reve until conditions r met (upon completion of a building, 70% complete)exchange transaction ( $1500 received for subscriptions to a monthly child care magazine with a fair market value to subscribers of $1,000) , contri rev is reduced by fair value of consideration , only 500 is contri rev
conversion of debt to equity , CF?
disclosed as supplemental information
Merchandise out on consignment at sales price, including 40% markup on selling price , wut inventory account should be reduced ?
reduce this extra 40% mark up , get the # * 0.4
investment in equity securities are recog on bs at ? unrelized G/L recog in ?
at fair value at BSunrealized G/L recog in earnings
equity method, stock dividend vs cash dividend ?
cash dividend = reduce carry amount of investment stock dividend = as memorandum entry reducing the unit cost of all guard stock owned
dividend in arrear, ? report where ?
dividend in arrears is not accrued lia until actually declared ( div from cumulative preferred stock)report as disclosure on FS
disclosure about postretirement benefit and cost of providing those benefit
disclose the trend accumulated post-retirement benefit obligation
future contract to purchase 50 swiss francs, wut rate to use at year end ?
use the future 30 day rate at year end vs the contract price rate
operating lease interest payment, let say lease term is 5 years, payments r 56 months, entered lease agreement on Jun 1
payment * 56 monthsthen divided by 60 monthsthen * 7 months since June
escheat property held report where in goverment fund ?
in private purpose trust fund when principal and income are reportedin agency fund when the fund is held for another government
wut format does enterprise fund use to report CF operating activities ?
direct method
minimum requirement for general purpose external financial statements of govern?
MD&A, government-wide and fund financial statements with the notes to the financial statements, and RSI other than MD&A in addition to CAFR), which includes information additional to the basic general-purpose financial statements.
when not to use blending unit
Because only two of the seven school board seats are occupied by council members, the governing body of the school board is not “substantially the same” as the city council.
the amount of intergovernmental receivables reported by the general fund at the close of the fiscal year
The receivable would equal the difference between the amount of the advance and the revenues of $400,000 (the amount spent on qualifying expenditures).reve less advance received = intergovernmental receivable
how should interest on debt be reported on governent wide FS ?
Interest that clearly derives from borrowing that is essential to support a program should be reported as a direct expense of that program, interest that does not qualify as a direct expense should be reported as a separate line. The two types of interest should not be combined. Interest is reported as a component of other functions or a separate line, but not at the bottom of the statement. Although interest on long-term debt is usually an indirect expense, it should be reported as a separate line and not allocated.
which statements r required for NFP ?
The basic financial statements for a not-for-profit entity are statement of financial position (like a balance sheet), statement of activities, statement of cash flows, and for voluntary health and welfare entities, a statement of functional expensesAssets, liabilities, and net assets on financial position
The financial reporting framework for small- and medium-sized entities has been developed by the
AICPA
what is monetary asset ?
r items whose amounts are fixed in term of number of dollarsex: demadn bank deposit, net long term receivables
issue cost and debt insurance in government fund ?
expense all
statement of net assets available for benefits of the plan must include
total asset, total lia, net asset reflecting all investments at fair value, net asset available for benfits
interest income on a loan ?
the interset income reflects the effective interst rate applied to the net proceeds received. this is an application of the effective interst method
applying dollar value LIFO
work on EV of base yr cost first , then subtract BE of base yr cost to find the layer, then multiple this layer with the index to get the new LIFO layer, then get base yer + this layer
The excess of proceeds over cost of treasury stock sold , effect ?
credit to APIC
numberator for basic EPS ? when there is convertible pref share and convertible bond ?
you still add the converted preff and converted bons to weighted C/Spreff div is not deducted from NI in basic EPSwhen cumu preff stock is not convertible to CS, DO NOT add these to find weight outstaing CS
gain on debt restructure?
watch out, recognizes a gain or loss on the transfer of assetsrecognizes a gain on the restructuring of a debtEven though a total gain of $75,000 is recognized on the income statement, the portion attributable to the restructuring is $50,000.
collection of a note receivable , where on CF?
investing
when debt r paid with stock and property and cash, effect on SHE ?
diff of FV of stock/property+cash and carry value of debt, go to RE , which increase equity and stocks issued also add to equityincrease in SHE = gain on restructuring ( this to go RE) + increase in C/S + increase in APIC
own 5% interest in King, then King declared $6000 liquidating div , what reprot as dividend income ?
0 since liquidating dividend is not income, but rather a return of investment to owners.
what amounts of subsequent years’ lease payments should be disclosed
each of the next 5 year, and TOTAL aggregated including these 5 years100k each yr for 5 year and 900k in total
NFP received contribution that is restricted to long term purpose like construction , report where on CF?
financing activities
A nonmonetary exchange is generally measured based
A nonmonetary exchange is generally measured based on the fair market value of the assets exchanged. If the exchange lacks commercial substance, the asset is measured at its book value before the exchange.
A company using the composite depreciation method for its fleet of trucks, cars, and campers retired one of its trucks and received cash from a salvage company. The net carrying amount of these composite asset accounts would be decreased by the
cash proceeds received
which item is nonmonetary ?
Monetary assets are cash or items whose amounts are fixed in terms of numbers of dollars. All of the assets are monetary assets except for accumulated depreciation.
declared 30% stock dividend ?, effeect on SHE ?
SHE not changedstock div just reclass RE as contributed capital
IFRS, impairment loss
compare carry amount vs recoverablerecoverable = greater of value in use (present value of discounted CF) or net realizable value (sale proceed less cost to sell)
sale type lease , profit ?
present value of lease payment - carry value of leased property
the statistical section of CAFR ?
is not part of the basic financial statement
when to accrue for vacation pay ?
as long as the right is vest OR at least accumulate ( carry over to the next period)
Purchasing power gain or loss is computed by r
Purchasing power gain or loss is computed by restating monetary assets and liabilities in units of constant purchasing power. Rising prices would cause liabilities to be paid with less valuable dollars, so equity investment in unconsolidated subsidiaries, warranty obligations, and wages payable would result in a purchasing power gain. Receipt of less valuable dollars from refundable deposits would result in a purchasing power loss.
chosen to apply the revaluation model to valuing this equipment , in IFRS,
When the carrying value of the assets differs materially from the fair value of the assets, a revaluation must occur, with any increase being included in asset revaluation surplus, an equity account, like other comprehensive income, and a decrease being accounted for as an other loss included in income from operation
interest capitalization, if weight avg expenditure = 625k, contruction loan 500k at 12%, other debt is 10%, 800k ?
500k0.12 = 60k add (625-500)0.1 other rate = 10.5
term bonds ?
are schedule to be outstanding for a fixed period of time
where to report NCI in IS ?
FASB ASC 810-10-45-19 requires that the consolidated amounts of these items (revenues, expenses, gains, losses, net income or loss, and other comprehensive income) be reported on the income statement. The amount of consolidated net income attributable to the parent and to the noncontrolling interest must be clearly identified and presented on the face of the consolidated statement of income.
purchased merchandise for 300,000 British pounds from a vendor in London on November 30, 20X1. Payment in British pounds was due on January 30, 20X2.
11/30/X1 12/31/X1 ———- ———-Spot-rate $1.65 $1.62
IFRS difference for CF?
bank overdrafts are presented as operating activities for IFRS and financing activities in U.S. GAAP,interest and dividends received are presented as operating or investing activities for IFRS and only as operating activities in U.S. GAAP, andthe most recent two years (i.e., comparative periods) must be presented.
wut to do with other inventory method, other than LIFO or retail inventory method ? wut inventory method does IFRS use ?
use the lower of cost or NRV
IFRS also use lower of cost or NRV,
interest capitalization if obtained 300k loan 10% interest to finance contruction, Jan 1 purchased land for 120k, Sep 1 progress payment to contractor 150k, interest cap at Dec 31?
(120k12/12 + 150k4/12)*0.08 = 17k
operating loss carry forward & valuation allowance
In 20X1, Larkin should recognize a noncurrent deferred tax asset and the related noncurrent deferred tax benefit of $4,000 ($10,000 NOL × 40% tax rate). However, Larkin also must recognize a $1,200 valuation allowance in 20X1. Thus, in 20X1 Larkin should recognize a net tax expense (benefit) of $(4,000) + $1,200 = $(2,800). Note that the recognition of the valuation allowance reduces the net tax benefit recognized in 20X1. The decision in 20X2 that the valuation allowance is no longer necessary means that the valuation allowance should be eliminated, as shown in the following entry in 20X2: Valuation allowance 1,200 Tax expense/benefit - deferred 1,200Therefore, tax expense (benefit) in 20X2 has a credit balance of $(1,200), indicating a deferred tax benefit. This $(1,200) tax benefit recognized in 20X2 is the change in deferred tax expense/benefit arising from changed circumstances causing a change in judgment as to the amount of valuation.
how to calculate NCI ? if purchased 75% Kid, Kid has asset 180k, lia 60k , C/S 50, RE 70k?
Noncontrolling holding x Net assets of Kidd = (1.00 - 0.75) x ($50,000 + $70,000) = 0.25 x $120,000 = $30,000
how to report dividend paid in consolidated statemetn? Peace is parent, Surge is sub
Only dividends paid to Peace shareholders will be reported as dividends paid. Dividends paid to Peace by Surge will be eliminated in consolidation. Dividends paid to shareholders other than Peace will be reported as an adjustment to the noncontrolling interest account.
The diluting effect of options and warrants and their equivalents is reflected in diluted EPS by application of the treasury stock method, which assumes that
proceeds from exercise are used to purchase common stock at the average market price.
A mandatorily redeemable financial instrument, such as mandatorily redeemable preferred stock, must be classified as a liability unless
unless the redemption is required to occur only upon the liquidation or termination of the reporting entity.
annual amortization of computer software ?
greater of Sales for 20X2 were 30% of expected total sales of the software or Straight line
combining fund statements are ?
part of comprehensive financial report, but not part of the basic financial statement
Assuming no outstanding encumbrances at year-end and a budgetary entry not using a separate budgetary fund balance account, closing entries for which of the following situations would increase the unassigned fund balance at year-end
appropriation exceed actual expenditure
general fund defer tax reve to rev for curr year?
begin recei - begin defer rev - begin AD = prior year revcurr year rev = receipt - prior yer rev + end recei
In preparing combined financial statements for a governmental entity, interfund receivables and payables should be
reported as amounts due to and due from other funds
The University of Tulsa, a private institution, is required to report under the standards of which of the following bodies
FASB
APIC when doing TS at par method ? wut to do when initially and after issues TS
let say initially, issued share at $15,with 10 par, 5 credit to APIClater, purchase TS at 20, Dr Ts 10 par, Dr TS AT 5 only cuzz u only have 5, C cash 20, the remaining is debit RE 5
An entity with preferred stock that has a preference in involuntary liquidation “considerably” in excess of par shall
disclose the liquidation preference in the equity section of the statement of financial position.
subsequent events
If the events that gave rise to litigation had taken place before the balance sheet date and that litigation is settled, after the balance sheet date but before the financial statements are issued or are available to be issued, for an amount different from the liability recorded in the accounts, then the settlement amount should be considered in estimating the amount of liability recognized in the financial statements at the balance sheet date.
does lease get test for impairment ?
capital leaseLong-lived assets of lessors subject to operating leasesLong-term prepaid assets.Proved oil and gas properties that are being accounted for using the successful-efforts method of accounting
Expenditures of a governmental unit for insurance extending over more than one accounting period
GASB 1600.127.b states: “Expenditures for insurance and similar services (prepaid items) extending over more than one accounting period NEED NOT be allocated between or among accounting periods, but MAY be accounted for as expenditures of the period of acquisition.”
general fund defer rev
Deferred RevenuesEnding receivable $600,000Less collections June 30 through August 30 (125,000)Less ending allowance for doubtful accounts (60,000) ———
total amount of interest revenue one earns on a note is
The total amount of interest revenue one earns on a note is related to the total payments but also to the present value of the note, with the discount recognized here initially.The total amount to be received on this note is 5 years multiplied by $5,009, as specified, for a total of $25,045. Interest is generally the amount returned over and above the amount originally recognized, which was $19,485 originally. Thus, the total interest revenue is $25,045 − $19,485, or $5,560.
in accounting for a long-term construction contract, assuming revenue is recognized over time, the progress billings on contracts account is a:
The current asset account maintaining an inventory value for the costs and profits recognized so far on the contract has a contra account of progress billings, lowering its carrying value. If the billings exceed the construction in process, then a current liability can exist instead.
