Shit I keep forgetting

Question 1

From Accrual to Cash

Answer 1

^Cash = ^L + ^E - ^OA

Question 2

From Cash to Accrual

Answer 2

^E = ^A - ^L

Question 3

IF Converted method for Diluted earnings per share - Usually convertible bonds

Answer 3

1. Multiply bonds the bond by its rate then by (1 minus tax rate)
2. Multiply number of bonds by amount they are converted into
3. Add number one to the numerator and 2 to the denominator

Question 4

Treasury stock method

Answer 4

1. Multiply common stock by market value then divide by average market price.
2. Add convertible shares then subtract 1* from the number of shares of common stock in the denominator

Question 5

If there is a time issue with diluted earnings per share

Answer 5

1. Calculate EPS first
2. Multiply out the DEPS and multiply by month ratio then
3. Then add to EPS

Question 6

Remeasurement

Answer 6

The foreign subsidiary’s functional currency is the reporting currency of the parent and the subsidiary is dependent on the parent

Balance Sheet: monetary items use current rate and nonmentary use historical

Income Statement: non-balance sheet items use weighted average and balance sheet items like COGS and depreciation use historical rate

Remeasurement gains and losses are reported on the income statement

Question 7

Translation

Answer 7

Subsidiary’s currency is its functional currency and it is independent of its parent

Income statement: weighted average

Balance sheet: assets and liabilities uses current rate, common stock uses historical, and retained earnings is a rollforward

Translation gain or loss is reported in comprehensive income

Question 8

Monetary and nonmonetary items

Answer 8

Monetary: Assets and liabilities denominated in dollars like payables and receivables

Nonmonetary: Shit that fluctuates in value like PP&E, inventory, and stocks

Question 9

Nonmonetary exchange rules

Answer 9

• If there is gain, but cash is paid then no gain is recognized and new asset is sum of the asset given up plus cash paid
• If cash is received and there is a loss the record the loss

Question 10

25% rule

Answer 10

• 1st determine potential gain by comparing BV of asset being given up to its FV(either given or FV of asset received plus cash)
• Divide cash received by consideration received(cash plus FV of asset received) and see if its greater of less than 25%
• Either recognize whole gain or portion less than 25%

Question 11

Average Accumulated Expenditures - Weighted Average

A firm begins construction on January 1 by making a $40,000 construction payment to a contractor. On July 1, another $40,000 payment is made.

Answer 11

AAE = $40,000 + $40,000(6/12) = $60,000.

Question 12

Average Accumulated Expenditures - Simple Average

Assume small discrete payments made throughout the year for $180,000 were paid

Answer 12

AAE = Average of beginning & ending costs (0 + 180,000)/2 = 90,000

Question 13

Interest to be capitalized with weighted average

Answer 13

1. ) Find Average Accumulated Expenditures(AAE)
2. )Add up all the debt outstanding
3. )Multiply each debt instrument by interest rate and add up
4. )Divide sum of interest by sum of debt outstanding & then multiply by AAE

Question 14

Interest to be capitalized with specific method

Answer 14

1. ) Find Average Accumulated Expenditures(AAE)
2. )Add up all the debt outstanding not related to construction
3. )Multiply each debt instrument not related to construction by interest rate and add up
4. )Divide sum of interest by sum of debt outstanding
5. )Multiply construction portion by interest rate
6. )Subtract construction portion from AAE then multiply that number by nonconstruction rate
7. )Add construction and nonconstruction totals

Question 15

Asset Impairment

Answer 15

If CV of asset is greater than undiscounted future cash flows then you have an impairment; and the impairment is the difference between the CV and the FV

Question 16

Dollar Value Conversion Index

Answer 16

Ending inventory in current year dollars divided by Ending inventory in base year dollars

Question 17

Dollar Value Inventory Steps

Answer 17

1. ) Multiply ending inventory by (1 divided by index)
2. ) Find the difference between that number at beginning inventory
3. ) Multiply the difference by the price index
4. ) Add that to beginning inventory

Question 18

Inventory Margins

Answer 18

Sales - Cost = Margin
100 - 80 = 20

Margin on Sales: 20/100 = 20%
Margin on Cost: 20/80 = 25%

Question 19

Accounting for percentage of completion

Answer 19

1. Contract price minus estimated total cost equals gross profit
2. % of completion is total cost to date divided by total estimated cost of contract
3. Multiply step 1 by step 2 for gross profit earned
4. Current year gross profit is profit to date minus previous year profit to date

Question 20

Debt Retirement Journal Entry

Answer 20

Dr. Bonds Payable - Face of Bonds Retired
Dr. Premium - Unamortized Portion
Dr. Loss - Plug
Cr. Bond Issue Costs - Unamortized Portion
Cr. Discount - Unamortized Portion
Cr Cash - Market Price
Cr. Gain - Plug

Question 21

How to calculate discounting notes

Answer 21

1. Multiple face value by rate while remembering the date for interest then add that to the face value
2. Multiply rate by remaining life of the note divided by year
3. Subtract 2 from 3

Question 22

Inventory Consolidation Table

Answer 22

———————Should be—–P—–S—–Eliminations
Sales(dr)
COGS(cr)
Inventory(cr)

Question 23

Depreciable Asset Consolidation Table

Answer 23

-----------------Should be-----What is-----Difference
Equipment
Accum Dep
Depreciation
Gain or R/E

Question 24

Grant Options Journal Entries

Answer 24

Expense JE
Dr. Compensation Expense
Cr. APIC - Stock Options

JE to exercise options
Dr. Cash - Stocks * Original APIC
Dr. APIC - Stock options: reversal for expense
Cr. Common Stock - PAR
Cr. APIC

Question 25

Eliminating Entry when P owns 100% of S

Answer 25

Dr. Common Stock (of subsidiary) Dr. Additional Paid-in Cap (of subsidiary) Dr. Retained Earnings (of subsidiary) Dr. Identifiable Assets (of subsidiary to FV, as needed) Dr. Goodwill (if Investment cost > FV of subsidiary's NA) Cr. Identifiable Liabilities (of subsidiary to FV, as needed) Cr. Investment in subsidiary (from parent's books)

Question 26

Eliminating Entry when P doesn't down 100% of S

Answer 26

Dr. Common Stock (of subsidiary) Dr. Add'l Paid-in Cap (of subsidiary) Dr. Retained Earnings (of subsidiary) Dr. Identifiable Assets (of subsidiary to FV, as needed) Dr. Goodwill (if Investment value > FV of subsidiary's NA) Cr. Identifiable Liabilities (of subsidiary to FV, as needed) Cr. Investment in subsidiary (from parent's books) Cr. Noncontrolling Interest

Question 27

Consolidation after Acquisition

Answer 27

- Balance Sheet: P + S + FV Increment - Intercompany Balances - Income Statement: P + S since acquisition - Depreciation of FV Increment - Equity: P only

Question 28

Journal Entry to book ARO

Answer 28

Dr. Asset Retirement Cost (ARC) Cr. Asset Retirement Obligation (ARO) Present value of future cost*Risk free rate

Question 29

How to calculate accretion expense

Answer 29

Multiply PV of future cost by the accretion rate

Question 30

Accretion journal entries at end of year

Answer 30

1. Depreciation Dr. Depreciation Cr. A/D - PV of future cost divided by number of years 2. ARO journal entry Dr. Accretion Expense Cr. ARO - calculate accretion expense

Question 31

Intercompany bond rules

Answer 31

If parent purchases bond at a premium then R/E decreases but if parent buys at a discount the R/E increases

Question 32

Note about impairment and goodwill

Answer 32

Goodwill impairment can never me more than the original impairment

Question 33

Calculating Bonds in between interest dates

Answer 33

1. Multiply face amount by discount or premium 2. Multiply face by the coupon rate then multiply by number months in between issue date and bond date ratio 3. Add 1 and 2

Question 34

How to do straight line bonds

Answer 34

Divide number of months in question by total months and multiply by the premium or discount

Question 35

Balance Per Bank

Answer 35

+ Deposits in Transit + Cash on Hand - Outstanding Checks +/- Errors

Question 36

Balance Per Books

Answer 36

``` + Interest Earned + Note Collected - Service Charges - NSF Checks +/- Errors ```

Question 37

Operating lease note lessee

Answer 37

Its calculated using straight line for lessee?

Question 38

Units of production

Answer 38

Unit production rate multiplied by units produced