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60 Cards in this Set
- Front
- Back
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Total Compensation expense
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FV *shares awared
JE Compensation Ex. Paid In restricted stock/options |
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For awarding Restricted Stock there is
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No JE only a JE when recording expense at the end of the yr
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When recording Comp Ex
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you divide by number of years till you earn it. Ex. employee must work 3 year before they are awared the stock, divide by 3
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For final JE when recording RS or stock options
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Paid in cap. RS or stock options= total comp. cost
Common Stock Paid in Excess of par |
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Weighted Avg.
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Total Comp Ex./ # of shares
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For recording JE for vesting options, for total comp. Ex. per year
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divide by award date to vesting date. EX. awarded 2011 Jan and it vest on dec 31 2012 divide by 2 because 2 yrs
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When Forfeit rate changes, go back retrospectively, if rate goes from 0%to 6% in 2nd yr
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Ex total exp. 75 / 3 year before vested, 25 each year second year only 23.5 should be recorded each yr 75* .06= 4.5, 75- 4.5= 70.5/ 3= 23.5 but u must subtract extra from last yr (1.5) so 23.5 - 1.5 is 22 for second yr
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JE for recording exercise of options
12 million sahres Exeecise price 14 per share Discount Bought at 11 per share |
Cash (plug in)
Paid in Options- ( diff btw exercise and cost/ bought at)14-11=3 *12 =36 Common Stock # of share * 1 par= 12*1=12 Paid In Excess of Par Exercised-1 14-1= 13*12=156 |
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Basic EPS
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NI- Preferred Shares/Weighted Avg. outstanding common stock
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Weighted Avg. Outstanding Stock
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# of shares outstanding* # of months outstanding/12
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For Stock Splits and Stock Divs.
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Do an adjustment, Multiply by 1+% of Stock Div
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Net income Less: What for Preferred and what for Non-Cumulative preferred divs.
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Current period’s cumulative preferred stock dividends (whether or not declared) Less: Noncumulative preferred stock dividends (only if declared)
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For Preferred Divs. If given a % , par value, # of shares
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multiply them all together
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For finding Diluted EPS when there is an option involved
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1. adjust for stock divs.
2. # of shares * exercise price 3. divided by avg. market price of stock 4. # of shares- answer from #3 |
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When dealing with options exercised mid yr
for EPS for diluted EPS |
1. Add number of shares that could be exercised * number of months/12
2. see options card for diluted EPS and multiply that by months and do # 1 |
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What changes basic EPS
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options, not convetibles , unless mid yr
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for diluted EPS when dealing with convertible bond
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1. take % of bond* # of bonds
2. answer in #1 plus NI and Pre Shares 3. minus tax rate * answer in 1 4 add to denominator # of shares convertible |
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When the exercise price exceeds the market price,
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the securities are antidilutive and are excluded from the calculation of diluted EPS
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Operating Activities
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Inflow: cash received from revenues,
Outflow: Cash paid for expenses EX. interest |
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Investing Activities
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inflow: Sale of property, plant, equipment, or intangibles/ sale of investments in securities/collection of loans
Outflows: Purchase of PPE or intangibles/ purchase of investments in securities/ loans to others * not sale of equipment! |
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Financing Activities
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Inflows: Issuance of stock or bond or notes
Outflows: payment of divs./ repurchase of stock/ repayment of debt |
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ID method Gain on Sale of PPE
loss on sale of PPE |
subtracted from NI
added to NI |
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deprecation Expense ID
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added to NI
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ID Incr. in AR
Decr. in AR ID |
subtracted from NI
added to NI |
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Incr in Inventory
Decr. in Inventory ID |
subtracted from NI
Added to NI |
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Incr. in AP or Salaries payable
Decr. in AP or SP ID |
added to NI
subtract from NI |
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discount on bonds payable
premium on bond payable |
added to NI
subtract from NI |
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Decr. on prepaid
Incr. in prepaid |
added to NI
Sub. from NI |
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Decr. in income tax payable
Incr in TP |
subtract from NI
add to NI |
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DM Operating Activities
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Inflows: from customers. from investment rev.
Outflows: to suppliers, employees, interest, insurance,income tax |
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Indirect method OP activities
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sale of PPE/Depri Ex/AR/AP/Salaries Payable/Bonds Payable/ prepaid insurance/ income tax payable
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When finding cash to suppliers, starting with COGS
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opposite from NI
Incr. in INV. add to cogs decr in INV sub from cogs Incr in AP sub. from cogs decr. in added to Cogs |
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When finding cash paid to interest, starting with bad debt expense
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Bond Interest payable
Incr. sub from bad debt decr add to bad debt Unamortized discount incr add to bad debt decr sub from bad debt |
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when finding cash paid fro tax, starting with income tax ex.
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income tax payable
incr- sub decr- add same for DTL deferred tax liability |
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Payment for the early extinguishment of
long-term notes |
financing activity, use FV not book value
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Declaration of cash dividends
Distribution of Divs. |
No activity
financing activity |
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No Interest in ...
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financing or investing activities, only operating
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prepaid insurance decr.
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added to NI
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how to find Diluted EPS for vesting stock. 3 yrs
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$ 270,000 ($5 market price per share × 54,000 shares)
÷ 3 years vesting period $ 90,000 compensation expense per year × 2 $ 180,000 expensed in 2010 and 2011 $ 90,000 unexpensed compensation at Dec. 31, 2011 * Assumed purchase of treasury shares $ 90,000 proceeds ÷ $ 5 (average market price) 18,000 shares 54000-18000= 36000 is added to # of shares for Diluted EPS No change to numerator |
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exam 2 if you fail to amortize a bond premium instead just debited int. exp. and credited the cash acct for the cash paid. what is the effect on interest expense and bond carrying value
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both overstated
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Amortization Table
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outstanding balance * int. rate = effective interest
cash - effective interest = decr. to balance |
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10 million 9% convertible bonds selling at 101, each 1000 bond is convertible to 40 share similar bonds that arent convertible at selling at 99 GAAP
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credit premium on bond payable of 100k
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same as 42 but for IFRS
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credit conteervible bonds payable for 9,900,000
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for a lessor , leases can be classified as
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operating, direct financing, sales type
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for a lessee to have a capital lease the lease must meet
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any one of the four criteria by GAAP
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not part of criteria for classifying a lease as a capital lease
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the noncancellable amount is equal to 90% or more of economic life of asset
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what is the correct asset value reported in balance sheet by lessee for an operating lease
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zero unless there is a prepayment or accrual
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operating lease for the payments they should
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credit cash
debit unearned rent rev. |
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Fransisco
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800238
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direct financing lease what is the correct interest entry
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subtract first payment (no interest) then multiply by implicit rate 2. credit interest rec. debit int. rev.
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Princess corp
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293980
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depriciation on a amortization table
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top balance and divide by number of years
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when calculating tax expense you must ...
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take out temporary difference then multiply by tax rate
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when calulating tax expense
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income 200 - depri ex 70 - depri in tax return 110 * tax rat (40) then add back depri tax return 110=118
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which temporary difference usually creates a deferred tax asset?
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accrued warranty expense
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the valuation allowance acct that is used with deferred taxes relates to ...
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only to deferred tax assets
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In recouncilling pretax acctounting income to taxable income , interest earned on munis is a
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permanent difference
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Under current tax law a net operating loss may be carried forward up to
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20 years
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Pension Expense equals
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+service expense
+ interest + return of plan asset Amortized portion of + Prior Service Cost + or (-) Losses or gains from revisions |
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Plan Asset =
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return on assets
cash contribution less: benefits paid |
