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Flashcards in F7 Deck (33):
1

What are the 5 parts of Stockholders' Equity?

Capital Stock, APIC, RE, AOCI, T/S

2

What is included in Capital Stock?

Par value. Authorized, issued, and outstanding. Common Stock. Preferred Stock

3

How do you calculate common stock?

Total SE – P/S outstanding (@ greater of call price or par value) – Cumulative P/S div in arrears = Common SE

4

How do you calculate BV per common share?

BV per common share = Common SE / CS outstanding

5

What is APIC?

Contributed capital in excess of par, sale of T/S @ gain, quasi-reorg, issue liquidating div, conversion of bond, declaration of small stock div

6

How do you calculate the change in RE?

NI – div declared +/- prior rd adj +/- retrospective accounting change + adj from quasi-reorg = change in RE

7

How do you classify RE?

unappropriated or appropriated for …

8

What is a quasi-reorganization?

accounting adjustment, not a legal reorg. Purpose = to restate overvalued A to lower FV (reduce future dep) and eliminate RE deficit

9

What is treasury stock?

T/S is a debit. Reduces SE. Reacquire/repurchase of stock.

10

What are the methods to value T/S?

cost (most common) or par

11

What is the cost method for valuing T/S?

Record/carry T/S @ reacquisition cost. G/L in APIC when reissued or retired.

12

What is the par method for valuing T/S?

Record/carry T/S @ par value G/L in APIC when reacquired.

13

What are the dates for dividends?

date of declaration, record, and payment

14

What is a small stock dividend?

Small < 20-25%... reduce RE by FMV stock

15

What is a large stock dividend?

Large > 20-25%... reduce RE by par value stock

16

What are non-compensatory stock options?

GAAP only. No J/E until stock purchased, then regular entry. Most employees are eligible and no discount available.

17

What are compensatory stock options?

GAAP & IFRS. The compensation expense is allocated over service period. The fair value is an expense to the issuer.

18

What is the difference between a simple v. complex capital structure?

Simple = C/S outstanding only. (Basic EPS only). Complex = securities can be potentially converted to C/S (Basic & Diluted EPS).

19

How do you calculate Basic EPS?

Basic EPS = Income available to Common S/H / WACSO

20

What is income available to common S/H?

NI – PD (preferred dividends)

21

What is WACSO?

WA of CS Outstanding = Beg shares outstanding + shares sold (time weighted) – shares reacquired (time weighted) + stock dividends & splits (retroactive) – reverse stock splits (retroactive)

22

How are complex capital structures determined?

must have at least 1: convertible security, warrant or other option, contracts that may be settled in cash/stock, or contingent shares

23

How do you calculate diluted EPS?

Diluted EPS = income avail to Common S/H + interest on diluted securities / WACSO assuming all diluted securities converted to C/S

24

Dilutive vs. Antidilutive.

Dilutive: avg price > x price. Antidilutive: avg price < x price.

25

What are the 3 sections of the Statement of Cash Flows?

Operating Investing Financing

26

What is included in the operating section of the SCF?

most WC. Operating Assets = all CA except cash. Operating Liabilities = all non-interest bearing liabilities

27

What is included in the investing section of the SCF?

changes in non-current assets

28

What is included in the financing section of the SCF?

changes in interest-bearing debt & equity

29

How is CFO calculated in the direct method?

CFO = Cash received from customers + interest received – interest paid – cash paid to suppliers & employees + dividends received + sales of trading securities – purchases of trading securities – income taxes paid

30

How do you calculate cash received from customers?

Inflow = revenue + decrease A/R – increase unearned revenue

31

How do you calculate cash paid to supplier?

Outflow = COGS + increase Inv + decrease A/P

32

How do you calculate cash paid to employees?

Outflow = Salaries and wages expense + decrease wages payable

33

How is CFO calculated in the indirect method?

CFO = NI + dep & amort (discount) + losses – gains – amort (premium) – equity earnings + decrease OA + increase OL