FAR Formulas

Question 1

Assets

Answer 1

Question 2

Net Income / loss

Answer 2

Question 3

Cost of goods sold (COGS)

Answer 3

Question 4

Cost of goods manufactured (COGM)

Answer 4

Question 5

Answer 5

Question 6

Income available to common shareholders

Answer 6

Question 7

BEPS

Answer 7

Question 8

Weighted average # shares calculation example

Answer 8

Question 9

Answer 9

Question 10

Answer 10

Question 11

Bonds purchased at a premium

Answer 11

The purchase price is higher than the face amount.
The stated rate is greater than the current market.

Question 12

Bonds purchased at a discount

Answer 12

The purchase price is lower than the face amount.
The stated rate is less than the current market.

Question 13

Carrying amount of AR

Answer 13

Question 14

Weighted-average method used under the periodic inventory accounting system

Answer 14

Question 15

Weighted-average method, periodic inventory example

Answer 15

Question 16

Weighted-average method

Answer 16

Question 17

Conversion index for Dollar-value LIFO

Answer 17

Question 18

Net realizable value (NRV)

Answer 18

Question 19

Lower of cost or market

Answer 19

This is replacement cost subject to a ceiling and floor. If
replacement cost is in between the ceiling and floor, then use replacement cost.

Ceiling = NRV

Floor = NRV - profit margin

Question 20

Gross margin method

Answer 20

This is used to estimate COGS using gross margin

Sales - cost = margin

Question 21

Inventory equation

Answer 21

Beginning inventory
ADD: Purchases
EQUALS: Goods available for sale
LESS: Ending inventory
EQUALS: Cost of goods sold

Question 22

Gross profit percentage

Answer 22

Question 23

PPE Caring Amount

Answer 23

Question 24

Depreciable base

Answer 24

Question 25

Straight-line depreciation

Answer 25

Question 26

DDB depreciation

Answer 26

Question 27

DDB example

Answer 27

Question 28

Sum-of-the-years’-digits depreciation

Answer 28

Question 29

Sum-of-the-years’-digits example

Answer 29