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Advanced Accounting > Exam 3 > Flashcards

Exam 3 Flashcards

(105 cards)

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1
Q

What Increases and Decreases the Equity Investment account

A

Net Income increases
Dividends decreases

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2
Q

What is the most important thing to remember for calculating equity investment and income?

A

You must multiply by the ownership percentage if you don’t own 100% of the subsidiary

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3
Q

Does Amortization bring Equity Investment down?

A

Yes

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4
Q

Are Dividends included in Equity Income?

A

No

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5
Q

Equity Investment Purchase JE

A

Eq Inv
Cash

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6
Q

Equity Investment Net Income JE

A

Eq Inv
Eq Inc

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7
Q

Equity Investment Dividend JE

A

Cash
Eq Inv

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8
Q

Equity Investment Amortization/Goodiwill Impair JE

A

Eq Inc
Eq Inv

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9
Q

Equity Investment Sale JE

A

Cash
Gain/Loss
Eq Inv

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10
Q

For Basic Intercompany Transactions what do we defer?

A

Amount of GP left in Ending Inventory (it will be sold next year)

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11
Q

Basic E JE

A

Com Stock
APIC
Ret Earn
Eq Inv

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12
Q

Basic A JE

A

Undervalued Assets
Overvalued Liabs
Goodwill
Overvalued Assets
Undervalued Liabs
Eq Inv

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13
Q

What is the Eq Inv account equal to directly after acquiring subs common stock?

A

The Purchase Price

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14
Q

For total Asset and Liability purchases how do you do the JE?

A

You list out all of the assets and liabilities at fair value

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15
Q

100% Stock purchase with Cash JE

A

Eq Inv
Cash

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16
Q

100% Stock purchase with CS and APIC JE

A

Eq Inc
CS
APIC

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17
Q

Where are Intangible Assets in the Balance Sheets before consolidation?

A

Embedded into the Eq Inv acccount, thats why we have to take them out of there

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18
Q

What are CS, APIC, and RE on the consolidated statements?

A

They are just the Parents Equity since subs equity gets deleted from consolidated statements

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19
Q

Basic C JE

A

Eq Inc
Eq Inv (Plug)
Div

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20
Q

Basic D JE

A

Op Exp
Overval Assts/Underval Liabs
Underval Assts/Overval Liabs
(Includes AAP Amort/Dep too)

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21
Q

Cost Method ADJ JE

A

Eq Inv
Ret Earn

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22
Q

Cost Method C JE

A

Div Inc/Eq Inc
Div

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23
Q

ADJ JE Calculation Steps (to get to EOY consolidated RE) COST METHOD ONLY

A

Change in Beg of time RE and Curr EOY RE of sub
Subtract Cum AAP
Add EOY RE of Parent

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24
Q

On consolidated statements what will Eq Inv and Eq Inc always be?

A

0

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25
Basic consolidation PPE formula (both Equity and Cost Method)
Parent PPE + Sub PPE + Excess PPE - Total Dep PPE
26
Do we do the ADJ JE EOY RE calculation for Equity Method?
No
27
ISale
Sales COGS
28
ISale amount
The actual sale amount
29
ICogs Deferral
COGS Inv
30
ICogs Deferral amount
GP * % remaining in Inv
31
ICogs Undefferal
Eq Inv COGS
32
ICogs Undefferal amount
The same as previous years GP * % remaining
33
IPay
AP AR
34
IPay amount
The amount of the receivable/payable earned or owed
35
IGain Land Purchase
Gain Sale Land
36
IGain Land Purchase amount
Just the gain on the sale
37
IGain Land No Sale
Eq Inv Land
38
IGain Land No Sale amount
Still the gain on the original sale
39
IGain Land Sale
Eq Inv' Gain Sale
40
IGain Land Sale amount
Still the gain on the original sale
41
IGain Equip Purch
Gain Sale Equip AD
42
IGain Equip Purch amounts
Gain is gain on sale Equip is difference between Gain and AD AD is AD deleted from sale
43
IDep Equip Purch
AD Dep Exp
44
IDep Equip Purch amount
Change between old yearly dep exp and new yearly dep exp
45
IGain Equip No Sale
Gain Sale Equip AD
46
IGain Equip No Sale amounts
Gain goes down by IDep amount Equip stays same as last time AD goes down by IDep amount
47
IDep Equip No Sale
AD Dep Exp
48
IDep Equip No Sale amount
Same as previous years
49
IGain Equip Sale
Eq Inv Gain Sale
50
IGain Equip Sale amount
Change between what old CV would have been and New CV at time of sale
51
General Equip Purch JE
Cash AD Gain Equip
52
How do we figure out basic Net Equipment/PPE?
Its literally just the same amount as if the IC sale had never happened (what the original amount would be)
53
For Downstream transactions do we put profit/gain through NCI?
No
54
How does ICogs Undeferral change under NCI?
Eq Inv NCI COGS
55
How does IGain Land No Sale change under NCI
Eq Inv NCI Land
56
How does IGain Land Sale change under NCI
Eq Inv NCI Gain
57
How does IGain Equip Sale change under NCI
Eq Inv NCI Gain
58
What is a control premium
When the actual divide between controlling and noncontrolling interest is not exactly the % stated
59
NCI (bal sheet) equation
% of Sub BVNA EOY + % of AAP that hasnt been amortized yet EOY - % Def GP (upstream transactions)
60
NCI C JE
Eq Inc Cons NI to NCI NCI Div Eq Inv
61
NCI E JE
CS APIC Ret Earn Eq Inv NCI
62
NCI A JE
Underval Asst/Overval Liab Goodwill Overval Asst/Underval Liab Eq Inv NCI
63
NCI D JE
Same as normal one
64
Does AAP Amort/Dep go into Consolidated Expenses
Yes
65
Cons Inc to NCI Equation
% of Sub NI - % of Upstream IC Gain + IDep amount (if applicable)
66
Does Consolidated Revenues deal with NCI?
No
67
Do we always add IDep amount to both CI and NCI when applicable
Yes
68
Gain Loss on retirement equation
Parent CV - Sub Purch Price
69
Consolidate NI equation for BOY Retirement of bonds
Parent NI + Sub NI + Int Exp - Int Inc +/- Gain/Loss on retirement
70
For BOY Retirement of bonds what will be reflected on income statement
Int Inc No Int Exp No Gain/Loss Yes
71
Consolidtae NI equation for PY Retirement of bonds
Parent NI Sub NI - Int Inc + Int Exp
72
For PY Retirment of bonds what will be reflected on income statement
Int Inc No Int Exp No Gain/Loss No
73
What do we do if bond retirement happens mid year
Int Inc and Int Exp get halved
74
Consolidated NI equation for EOY Retirement of bonds
Parent NI + Sub NI +/- Gain/Loss
75
For EOY Retirement of bonds what will be reflected on income statement
Int Inc No Int Exp Yes Gain/Loss Yes
76
What changes for retirement of bonds for NCI
The only thing that changes is that we only take the % of Sub NI everything else stays the same
77
Foreign Currency AR JEs
AR Sales AR FCTGain (switch sides if loss) Cash FCTG/L AR
78
Foreign Currency AP JEs
Inv AP FCTL AP (switch sides if gain) AP FCTG/L Cash
79
Forward Contract JEs
Forw Cont Sales/Inv Forw Cont Sales/Inv Cash Forw Cont (opposite if Forw Cont is negative)
80
What changes for Foreign Currency AR AP JEs when there are forward contracts
Last JE is Cash AR (opposite for AP)
81
What changes with a Firm Commitment?
It just offsets the Forward Contract until the end when you receive cash for the initial transaction and reclassify firm commit
82
Firm Commitment reclassify JE
Firm Comm Sales/Inv (opposite depends on Forw Cont)
83
Firm Commitment OG Transaction JE
Cash Sales (opposite for AP)
84
Cash Flow Hedge 2 main JEs
Forw Cont OCI FCTG (opposite if loss) Forw Cont Sales/Inv
85
Cash Flow Hedge Reclassify OCI
AOCI Sales/Inv (opposite if loss)
86
For the FV of contracts how do you find the correct rate to multiply by for AR and AP
AR is Beg-End AP is End-Beg
87
Local Currency
Currency in which sub records transactions and prepares financial statements
88
Functional Currency
Primary currency that sub does business in
89
Reporting Currency
Currency in which subs financial statements will be reported
90
Remeasurement Monetary Assets and Liabilities measurement
Current/EOY
91
Remeasurement Nonmonetary Assets and Liabilities measurement
Historical/BOY
92
Remeasurment Rev and Exp Nonmonetary Net Assets measurement
Historical/BOY
93
Remeasurement Rev and Exp Monetary Net Assets measurement
Average
94
Reameasurement Equity measurement
Specific rates for CS and APIC
95
Translation Assets and Liabilities measurement
Current/EOY
96
Translation Inc Stmnt measurement
Average
97
Translation Equity measurment
Historical
98
Which way do we complete remeasurement?
Bottom to top
99
Which way do we complete Translation
Top to bottom
100
What do we plug into the Balance Sheet in Remeasurement?
Retained Earnings
101
What is the rate used for Purchases
Average Rate
102
What is always given in remeasurement and translation problems
BOY Retained Earnings
103
What do we plug into the Retained Earnings Statement in Remeasurement
Net Income
104
What do we plug into the Income Statement in Remeasurement
Remeasurement Gain/Loss
105
What is the only plug we have in Translation (located in Balance Sheet)
Cumulative Translation Adjustment

Advanced Accounting (3 decks)

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