Stmt of Comp Income, Equity and Cash Flows (Mol. 6)

Question 1

“Other” Comprehensive Income Items (OCI)

Answer 1

1. Unrealized gains and losses on securities available for sale (AFS);
2. Unrecognized pension and postretirement benefit cost and gains. Currently, GAAP does not recognize all changes in these liabilities and assets immediately in income. Rather, some are recognized in other comprehensive income;
3. Foreign currency translation adjustments are changes in the value of foreign currency and accounts measured in foreign currency;
4. Certain deferred gains and losses from derivatives.

Question 2

Accumulated other comprehensive income (AOCI) is?

Answer 2

the amount carried over from the previous period, and then either increased or decreased during the current period.

Question 3

Interest paid on a bank note is also an operating activity?

Answer 3

Yes. Interest paid on a bank note is also an operating activity-remember the principle payments/receipts are financing activities, but the interest is operating.

Question 4

Formula for “Op income under indirect method”

Answer 4

Cash provided from operating activities is derived as follows: $78,000 net income - $82,000 accounts receivable increase + $24,000 accounts payable increase = $20,000. Net income is the starting point for operating activities under the indirect method.

Question 5

Formula for “Amount paid to suppliers”

Answer 5

Amount paid to suppliers = cost of goods sold - inventory decrease - AP increase.

Question 6

The formula “change in cash”

Answer 6

The formula change in cash = change in liabilities + change in equity - change in other assets