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Flashcards in Deck 19 Deck (21):
1

Dilutive shares

Avg. price is greater than the exercise price (must use treasury stock method) or Basic EPS > dilutive EPS

2

Formula to compute additional shares outstanding (Treasury stock method) =

Number of shares issued - ((# of shares x exercise price)/avg. market price))

3

Anti dilutive shares

Avg. price is less than exercise price (Basic EPS

4

Cash paid to suppliers =

COGS + increase in inventory - decreases in inv. + decrease in A/P - inc. in A/P

5

How do increases in current assets and decreases in current liabilities affect cash flow statement?

Uses of cash (decrease)

6

How do decreases in current assets and increases in current liabilities affect cash flow statement?

Source of cash (Increase)

7

How does bond discount amortization affect the cash flow statement?

Add back to net income in the operating activities section

8

Cash paid to purchase common stock should be included where in the statement of cash flows?

Subtraction from investing

9

The collection of notes receivable (loans) is recorded where in stmt of cash flows?

Investing

10

Interest received (Stmt of cash flows) - IFRS vs. GAAP

IFRS: operating or investing; Gaap: operating only

11

Interest paid (stmt of cash flows) - IFRS vs. GAAP

IFRS: operating or financing; GAAP: operating only

12

Dividends paid (stmt of cash flows) - IFRS vs. GAAP

IFRS: operating or financing; GAAP: financing only

13

Cash received from customers (direct method) =

Revenues - increase in A/R + decrease in A/R + increase in unearned revenue - decrease in unearned revenue

14

Gain/loss indirect method only =

Selling price - NBV

15

Operating cash flows (indirect method)

NI + depreciation expense & amor. + losses - gains - equity earnings +/- change in operating assets and operating liabilities

16

Investing activities

Change in non current assets (Ex: making loans to other entities, etc.)

17

Financing activities

Changes in interest bearing debt and equity

18

Where are capital lease obligations located in stmt of cash flows?

Considered a non cash activity; shown in a separate supplemental disclosure

19

Where are principal payments located in cash flow statement?

Financing outflow (interest paid is operating)

20

Journal entry for the retirement of treasury stock (cost method)

Dr. C/S and APIC; Cr. APIC - T/S and Treasury stock (at cost)

21

Examples of items that must be separately disclosed under indirect method?

Cash paid for income taxes and interest paid (both of these are included in the operating section of the stmt of cash flows)