Assignment 2 & 3 Formulas & Notes Flashcards

(33 cards)

1
Q

Contract Revenue Recognition (Service/product paid once work complete & services that are paid overtime)

A

Amount customer paid
Times: Percent of the aggregate price for completed service.
Equals: Revenue for services completed

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2
Q

Percent of Aggregate Price

A

Stand-alone price of service/product
Divide: Aggregate price
Equals: Percent of aggregate price

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3
Q

Percent Complete Method

A

Cumulative cost incurred
Divide: Total estimated cost
Equals: Percent complete

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4
Q

Percent Complete Method Revenue Recognition

A

Contract price
Multiply: Percent completed
Equals: Revenue

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5
Q

Variable Consideration

A

See Q4 on Assignment 2

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6
Q

Recognizing Revenue w/ Estimated Return

A

Cash received
Multiply: (1- Estimated return %)
Equals: Revenue

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7
Q

Calculating Return Allowance Liability

A

Cash received
Multiply: Estimated return %
Equals: Liability for return allowance

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8
Q

Cost of Sales w/ Estimated Return

A

Carrying value of inventory given to customer
Multiply: (1 - Estimated return %)
Equals: Cost of sales

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9
Q

Calculating Inventory Return Allowance

A

Carrying value of inventory given to customer
Multiply: Estimated return %
Equals: Inventory return allowance

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10
Q

Revenue Recognition w/ Gift Cards

A

Amount redeemed
Divided by: Redemption rate
Equals: Revenue

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11
Q

Calculating Ending Balance for Allowance Account

A

Beginning balance of allowance
Plus: Bad debt expense
Minus: Write-offs
Equals: Ending balance of allowance

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12
Q

Converting LIFO Inventory to FIFO Inventory

A

LIFO inventory
Plus: LIFO reserve
Equals: FIFO inventory

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13
Q

Converting LIFO Cost of Sales to FIFO Cost of Sales

A

LIFO cost of sales
Plus: LIFO beginning reserve
Minus: LIFO end reserve
Equals: FIFO cost of sales

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14
Q

Leases

A

See week 10 slides 23-45.

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15
Q

Inventory, FIFO, LIFO

A

See week 9

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16
Q

Calculating Goodwill

A

Total purchase consideration
Minus: Fair value of net indentifiable assets
Equals: Goodwill

17
Q

Calculating the Increase in Assets as a result of consolidation

A

Fair value of net identifiable assets
Plus: Goodwill
Minus: Cash consideration
Equals: Increase in assets

18
Q

Calculating Goodwill w/ Non-controlling Interest

A

Total consideration (including the fair value of non-controlling interest)
Minus: 100% Fair Value of the aquiree’s net identifialbe assets
Equals: Goodwill

(see week 11 slide 23)

19
Q

Net Identifiable Assets (NIA)

A

Identifiable assets
Minus: Identifiable liabilities
Equals: Net identifiable assets

(see week 11 slides 31-32)

20
Q

Calculating Goodwill with previously held equity interests

A

1) Total consideration (including the fair value of non-controlling interest)
Minus: 100% Fair Value of the aquiree’s net identifialbe assets
Equals: Goodwill

2) Total consideration & value to be allocated to net assets
Plus: Non-controlling interest
Minus: Net identifiable assets
Equals: Goodwill

(see week 11 slides 26-30)

21
Q

Calculating Consideration with previously held equity interests

A

Fair value of items transferred by acquirer
Plus: Fair value of contingent consideration
Plus: Fair value of non-controlling interests
Plus: Fair value of previously held equity interests
Equals: Total consideration

(see week 11 slide 30)

22
Q

Calculating Ending ESO Obligation

A

Beginning ESO obligation
Minus: Fair Value of ESOs exercised
Plus: Fair value of ESOs granted
Plus: Revaluation loss
Equals: Ending ESO obligation

23
Q

Options Exercised

A

Options exercised equal the intrinsic value when time value equals 0. Time value equals 0 when the options expire.

24
Q

Intrinsic value

A

Stock price
Minus: Exercise price
Equals: Intrinsic value

Intrinsic value cannot be negative, so if the stock price is less than the exercise price the intrinsic value is 0.

25
Inputs for calculating the fair value of options
1. Stock price at grant date 2. Exercise price 3. Expected stock price volatility 4. Expected life of the options 5. Risk free rate 6. Expected dividends on common stock
26
Pension Expense
Service cost Plus: Interest cost Minus: Expected return on plan assets Equals: Pension expense
27
Pension Benefit Obligation at the end of the year (When there is complete certainty)
PBO at the beginning of the year Plus: Service cost Plus: Interest cost Minus: Benefits paid during the year Equals: PBO at the end of the year
28
Fair Value of Plan Assets at the end of the year (When there is complete certainty)
FVPA at the beginning of the year Plus: Contributions made during the year Plus: Actual return on plan assets Minus: Benefits paid during the year Equals: FVPA at the end of the year
29
Pension Liability or Asset
PBO at the end of the year Minus: FVPA at the end of the year Equals: *Pension liability at the end of year *Liability if positive. Asset if negative.
30
Service cost, interest cost, & expected return on plan assets. components of operating or financial expenses?
Interest cost: Financial expense. Expected return on plan assets: Financial expense. Service cost: Operating expense.
31
Effect on Net Income from Pension
Net financial expense before tax Minus: Net operating profit before tax Equals: Net income
32
Taxable Income
US Federal Divide: US statutory rate Equals: Taxable income (For all tax questions see week 13: Ford Case slides 48-80).
33
Effective Tax Rate
GAAP tax expense Divide: GAAP pre-tax income Equals: Effective tax rate