Ninja Notes: Statement of Cash Flows; Flashcards
What are examples of Cash Received for Op. Activities?
Cash received from:
> Customers
> Int. and Dividends
> Trading securities
What are examples of Cash Paid for Op. Activities?
Cash paid for: > Vendors > Suppliers > Int. > (Relevant) Taxes > Trading securities
What are examples of Cash Received for Investing Activities?
Cash received for:
> Sale of PP&E
> Sale of Investments
> Loan Principle
What are examples of Cash Paid for Investing Activities?
Cash paid for: > Loans > Acquisitions > AFS or HTM securities > (Relevant) Taxes > Trading Securities
What are examples of Cash Received for Financing Activities?
Cash received for:
> Issuance of Stock
> Issuance of Debt
What are examples of Cash Paid for Financing Activities?
Cash paid for:
> Dividends
How does the Indirect Method work?
Starts with Net Income.
How does the Direct Method work?
Starts with Inc. for Continuing Ops.
Adjusts for changes in accounts like A/R, A/P, Inv. and non-cash revenues, expenses, gains, and losses.
How is APIC allocated when CS and PS are issued in a lump-sum purchase?
APIC for each is allocated by its respective % of the total FMV of the shares x the proceeds.
When does APIC increase for Stock Subscriptions?
On the date subscription is recorded, not the date paid or issued.
When are Dividends in Arrears for Cumulative preferred stock accrued?
Not accrued until declared.
How are dividends in arrears handled if a year passes and no Cumulative preferred stock in declared?
Then dividends in arrears are included as a disclosure, not an accrual in the financial statements.
How is a G/L determined on the transfer of a non-monetary asset to a shareholder?
It is the difference between the FMV of the asset distributed at the date of distribution and its CV on the company’s books.
For a stock dividend < 25% of CS outstanding, how should RE be handled?
Debit RE for FMV of stock.
For a stock dividend > 25% of CS outstanding, how should RE be handled?
Debit RE for par value of stock.
What effect do stock dividends and stock splits have on Total SHE?
No effect.
What does a Stock split do?
Stock splits only effect par value; APIC remains the same.
When is compensation expense recorded if options are exercised immediately?
At the time of grant, based on past service.
What interest rate is used to discount stock options?
The risk-free interest rate.
What is the measurement date for share-based payments classified as liabilities?
The settlement date.
How are compensation costs for share-based pmts. (classified as liabilities) measured?
By the change in the fair value of the instrument for each reporting period.
What is the primary purpose of a quasi reorganization?
To eliminated a deficit balance in RE by restating its assets to fair value.
When are contingent Issue Agreements included in Diluted EPS?
If contingency is met.
