FAR 1 Flashcards
(35 cards)
interest costs related to construction projects
capitalized based on weighted average ex: 4/1 $500,000 x5% = $2,083 5/1 $800,000 x5% = $3,333 6/1 $1,500,000 x5% = $6,250
= $11,666
how do find a corporation’s long term debt when bonds are issued with detachable stock warrants
subtract the stock warrants from the amount of bonds to find the corporation’s long term debt
ex:
$4,000,000 bonds at 101 $4,040,000
200,000 warrants at $1 FV (200,000)
LTD allocated to bonds = $3,840,000
Government funds measurement focus
current financial resources
management and general expenses incurred by a community foundation should be reported as
supporting services in a statement of activity
when an entity has significant influence over another entity, how should they account for it
using the equity method
under US GAAP, if an entity is not a going concern, how should the financial statements be prepared
liquidation basis
current ratio =
current assets / current liabilities
earnings per share =
(net income - preferred dividends) / weighted average of outstanding shares
when should liabilities of a sub be included in the consolidated financial statements
when they are 50% or more owned by a parent company
how should held-to-maturity investments be reported
at amortized cost
effective tax rate =
income tax expense / pretax expense
R&D expenses include, but are not limited to,
- personnel costs
- design/testing/construction
compensation costs should be
expensed over the service period
temporary differences that decrease a future taxable income are considered to be
noncurrent assets
for an overfunded pension plan, amortization of net gains would
increase retained earnings
financial statements are considered available to be issued when
- they are in a format that complies with GAAP
- all approvals for issuance have been obtained
the present value factor used to find the value of a finance lease includes the
implicit rate ex: annual lease payment x PV of implicit rate ----------------------------- lease liability before payment - lease payment ------------------------------ = lease liability
demonstrates how a not-for-profit organization’s resources are used in providing various programs and services
statement of activities
what does it mean if a budgetary control balance (open purchase order) exceeds encumbrance balance (purchase order outstanding)
an error must have been made
under the modified approach, how are infrastructure expenditures reported
as expenses, except for outlays that result in additions or improvements, which would be capitalized
required disclosures on the statement of cash flows
- major classes of gross cash receipts and gross payments made
- amount of income taxes paid
- reconciliation of net income to net cash flow from operations
when parent-subsidiary relationships exist, consolidated financial statements are prepared in recognition of the accounting concept of
economic entity
when assets are transferred in a troubled debt restructuring
- gains/losses = difference between debt and FV of asset transferred
- carrying amount of liability liquidated = liability
liability
- FV real estate transferred
—————————————-
= gain/loss
software costs
- coding costs after technological feasibility has been established
- testing costs after technological feasibility has been established
- costs of producing product masters for training materials
