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13 Cards in this Set
- Front
- Back
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Working Capital |
Current Assets - Current Liabilities |
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Current Ratio |
Current Assets/Current Liabilities |
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Quick Ratio |
[current (cash + mrktable sec. + receivables)]/current liabilities |
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Debt-to-Equity Ratio |
(*debt only includes interest bearing debt--bank debt but not A/P) |
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Interest Coverage Ratio |
(NI + int. exp + tax exp.)/Interest Expense |
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Template for BOTH Temporary & Permanent Book/Tax Differences |
pretax book income xx +/- permanent differences xx _________________________________________________ PBITWSBT xx [times] tax rate = tax expense +/- Temp. differences (xx) [times] tax rate= DTL ________________________________________________ Currently taxable income xx [times] tax rate = CTL |
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Template for NOL + Tax Credits & Journal Entry |
__________________________________________ Currently taxable income (xx) NOL Carryback [times] tax rate = refund rate NOL Carryforward [times] tax rate = DTA Refund receivable xx DTA xx ...................................Tax exp xx |
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Criteria for Capitalized Leases |
- lease transfers ownership to lessee at the end of the lease - lease containes a bargain purchase option at the end of the lease -lease term is for more than 75% of the asset's useful life - present value of minimum lease payments to be made under lease is more than 90% of the asset's fair market value |
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Journal entry when bond becomes riskier |
bonds payable xx ......................gain xx |
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journal entry when bond becomes safer |
loss xx ........................bond payable xx |
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categories of contingent liabilities |
remote - company ignores it reasonably possible - footnotes probably and estimable - record the liability & disclose in footnotes: expense xx ..................liability (or reserve) xx |
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FASB requirements for recording restructuring reserve |
- plan approved by BoD - identify and notify affected employees - after restructing, must disclose in footnotes: -original liability -how much of liability paid of in current period -how much of the liability was reversed because of overestimates -new accruals for unanticipated costs -ending balance of the liability (reversal is reported to same I/S line where original expense occurred) |
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What is a valuation allowance account? |
required if it is "more likely than not" that a DTA will not be realized Example: Elton thinks he'll earn 50k of taxable income in the next 20 years (10k less than the 60k he could deduct from his NOL carryforward) he records: tax exp 4k ..........valuation allowance 4k |
