Something Flashcards
Types of special purpose funds
Petty cash
Sinking fund
Payroll cash account
How is gain on death of employee calculated
Life insurance proceeds- cash surrender value
Increases to retained earnings
Net income
Decrease in retained earnings
Property dividends
Cash dividends
What is plugged to APIC
- When stock is issued, the difference between par and market value
- under the cost method, excess of proceeds over cost of T/S sold
What reduces bond proceeds
Stock warrants
Total cost of equipment =
Cash paid + note( net of discount)
What date do we recognize termination benefits
Date of communication to employees
Units of production depreciation method calculation
(Cost- salvage)/ total # of units
Original bond price is reduced by
Interest accrued
COGS
=Sales x (1-GP%)
OR
=BI+ Purchases(net)-EI
Annual required pension contribution is recorded as what on the financial statements
Expense
Bond issue costs are amortized over
The life of the bond
Calculation of Ending Inventory
BI + Net Purchases- COGS
- also equals avg inventory
Bond carrying value at retirement
=FV of bonds retired - unamortized bond issued costs
- remember to prorate for the share of bonds retired
AFS
- Recorded at FV
- temporary declines are recorded in OCI
- permanent declines are written down to FV and recorded in current earnings
Extraordinary Items
- not recorded for IFRS
- eliminated from GAAP . Now treats same as if unusual and infrequent now and includes in continuing operations
Initial cash debits for bonds issued
-for FV of bond + accrued interest less bond discount
Initial Bond credits
- Bonds Premium
- Bonds Payable( FV of bond)
- interest payable
Difference between Bond interest expense and Bonds payable
- bonds interest expense is carrying value at effective interest rate
- bonds payable( interest paid) is state rate x FV of bond
Characteristics of Bonds Discount
- debit balance
- amortized over life of bond with a credit
- carrying value increase over time to get to the Face Value
- effective interest rate is higher than the state interest rate
- interest expense is greater than cash interest( interest payable)
Fair Value Hedge
- reported at FV
- must disclose when a hedged firm commitment no longer qualifies as a FV hedge
Cash Flow Hedge
- recorded at cost ?
Capital Expenditures
- no current deduction therefore must recognize in the form of depreciation amortization or depletion
Effective interest calculation
= time period x effective interest x carrying value of bonds
memo entry
- rights of stock issued without consideration
Net Increase in SHE
- gain on settlement of debt + increase in SHE (shares issued x FV)
capital lease
- if lease term exceeds 75% of assets useful life
- lessee capitalizes lease at amount = PV of minimum lease payments =amount due at end of year x ordinary annuity for n periods at x %
- include amount of bargain purchase option
Interim reporting
- integral part of annual reporting
- uses effective annual income tax rate
OCI
- has a normal credit balance
- unamortized prior period service costs for defined benefit plans is a debit here
Cumulative dividends
- are annul requirement calculated at par x cummulative %
DGP
= GP% x accounts receivable
Bonds paid semiannually
- bond interest paid twice a year
- each time 50% of full year interest rate
Statement of cash flows from financing activities
Inflows - proceeds from the sale of stock Outflows - payment for early retirement of long- term bonds - dividends paid ( not declared)
Operating activities
Starts with Net Income
Inflows
- net change in a/r
- opposite change in allowance for uncollectible accounts
- net change in prepaid expense
- opposite change in accounts payable
HTM
- recorded at cost
- no unrealized gain or loss
- reclassified to trading securities
- reclassified to AFS adjust
Compensation expense
- record at FV at grant date / service period
How to allocate purchase price of securities when bought in a group
- allocate pro rata
Under IFRS lawsuits are recorded
- at best estimate
- discounted to PV
temporary difference creating dta
- net of temporary difference before dividends deductions minus dividends received deduction
- investment account ok for book but different for tax
Payroll tax liability
= federal tax expense + employee FICA + employer FICA
Transfer of resources been and among funds
-reported in the governmental fund operating segment as other financing sources or other financing uses
Eps
= net income/ Common shares outstanding
Price to earnings
= market price /Eps
If prices remain unchange
LIFO and FIFO will yield similar results.
If prices rise, which of the following will happen
LIFO will result in smaller inventory costs and larger cost of goods sold than FIFO.
If prices decline, which of the following will happen
FIFO will result in smaller inventory costs and larger cost of goods sold than LIFO
Which of the following methods comes closest to matching current costs against current revenues
LIFO
Discontinued operations result from a disposal that represents a strategic shift. Examples
- a sale of a product line that represents 15% of the entity’s total revenues;
- a sale of a geographical area that represents 20% of the entity’s total assets;
- a sale of the entity’s stores in one of its two types of store formats that have provided 15% of current-period net income and have, in the past, represented 30% to 40% of the entity’s net income;
- the sale of an equity method investment representing 20% of the entity’s total assets; or
- the sale of 80% of a product line representing 40% of total revenue, but only if the entity retains 20% of its ownership interest.
derivative instrument has three characteristics
- There is an underlying or notional amount.
- There is little or no initial net investment.
- Its term requires or permits net settlement
IFRS uses different stock account titles than U.S. GAAP
Share Capital
IFRS accounts for treasury stock retirements only by charging
an excess in purchase price and issue cost to paid-in capital.
IFRS includes a “revaluation surplu
revaluation of property, plant, and equipment; mineral resources; and intangible assets.
Goodwill
Goodwill is the excess of the fair value of the consideration given over the fair value of the net identifiable assets acquired.
compensation expense
restricted stock is earned equally over the vesting period
