Measurement, Valuation, & Disclosure - Investments And Short Term Items Flashcards
Types of factoring agreements
Nonrecourse - treat as a sale - don’t report receivables as asset
Recourse - no sale - treat cash received as liability
Equation for allowance for uncollectible accounts
Beg balance
+ Bad debt expense
- Accounts written off
+ Collected previous written off AR
Calculate factoring amount to be received
Amount of receivables
Minus reserve
Minus factoring fee
Minus interest
Calculate factoring interest cost
( ( AR - reserve - fee ) x interest rate x (credit terms / 360 )
Journal entry for factoring agreement
Cash Due from factor (Reserve) Loss on sale (Factor fee) Prepaid interest Accounts receivable
What are conversion costs
Direct labor plus manufacturing OH
Calculate cost of sales using weighted average method?
(Cost of beg inventory + cost of purchases ) / (units in beg inventory + units purchased)
Classes of accounting for debt securities
HTM
Trading
AFS
FVO
Equity method journal entry
Investment in company
Revenue
Cash of dividend receivable
Investment in company
Information needed in business combination
Acquirer Acquisition date ID assets acquired Liabilities assumed NCI Goodwill/ gain on bargain purchase
How is NCI originally valued
Fair value
How is goodwill calculated
FV of consideration transferred
+ FV NCI
+ any previous equity interest
- acquisition date of FV identifiable assets and liabilities assumed
What are acquisition related costs and how are they treated
Finders fee
Professional fees
Gen and admin costs
Expensed as incurred
How are issue costs for securities in a business combination treated
Underwriting, legal, tax expenses
Reduced APIC
How are debt Issue costs treated
Recorded as deferred charges on the B/S and amortized over life of debt
