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CPA - FAR > Flashcards: F4 - F7 > Flashcards

Flashcards: F4 - F7

1
Q

GAAP Refinanced before F/S issuance

A

Book as non-current

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2
Q

IFRS Refinanced before F/S issuance

A

Leave as current until refinanced

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3
Q

Restricted Cash Classification

A

To pay current = Current Cash; To pay non-current = Noncurrent Cash

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4
Q

Apply A/R Trade Discounts

A

Apply discount % first and then 2nd % discount on balance

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5
Q

A/R Expected Returns

A

Book nothing; only book allowance % based on past experience

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6
Q

Allowance for Doubtful Accts Entry

A

DR: Bad Debt CR: Allowance for Doubtful Accounts

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7
Q

W/O Specific Bad Debt Entry

A

DR: Allowance for Doubtful Accounts CR: Accounts Receivable

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8
Q

A/R Subsequent Cash Collections

A

GAAP: Reverse W/O DR: A/R CR: Allowance, Book Cash: DR: Cash CR: A/R

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9
Q

Pledging A/R as Collateral Entry

A

Footnote Disclosure Only

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10
Q

Pledging A/R w/Recourse

A

Footnote Disclosure Only

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11
Q

Pledging A/R w/out Recourse

A

Book sale as final; book loss on sale to I/S

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12
Q

Perpetual vs. Periodic

A

Perpetual = continuous, Periodic = at end of period, FIFO same for both

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13
Q

Calculate Moving average Inv. Cost

A

Compute weighted avg. after each purchase

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14
Q

Calculate Price Index Inv. Cost

A

(End Inv. @ Current/End Inv. @ Base) x Base - LIFO

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15
Q

Capitalize Add, Impr to Equip

A

Usefulness Incr = Incr Asset; Life Extended = Reduce Accum Depr.

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16
Q

Capitalize Land Costs Except

A

All costs up to the digging (excavation)

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17
Q

Treatment Land Improvements

A

Capitalize and depreciate

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18
Q

Capitalize Building Costs

A

Excavation forward; Purchase, neglected repairs, improvements, architecture

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19
Q

IFRS Investment Property Treatment

A

Capitalize @ Cost less depr. OR book @ Fair Value no depr.

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20
Q

Construction Interest

A

Cap. during construction only; use weighted avg. expenses to calculate int.

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21
Q

Sum of Years Depr.

A

N(N+1)/2 = sum all years, highest year 1st divided by sum of years x base (cost - salvage)

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22
Q

Declining Balance Depr.

A

2/N(years) x NBV (ignore salvage)

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23
Q

Asset Impairment Test

A

GAAP: Step 1 - Undisc. Cash flow

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24
Q

Calculate GAAP Asset Impairment

A

Step 2: Fair Value or Disc. Cash Flow minus carry value

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25
Q

Capital Lease Requirements (Buyer)

A

OWNS - N=90% FV

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26
Q

Capital Lease Requirements (Seller)

A

All the LUC -Lessee OWNS, no Uncertainties, reasonable Collectibility

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27
Q

Amount to Cap. Lease

A

Lessor of: FV or PV future lease payments (cost or market)

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28
Q

Sales-Type Financing

A

(2) Profits: Gain on Sale(FV > cost to lessor) AND Monthly Interest earned

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29
Q

Direct Financing

A

(1) Profit: Monthly Interest Earned only

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30
Q

What interest used in Lease Calc

A

Lessor of: Inplicit and inceremental interest rate

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31
Q

Cap. Lease Deprecation Life

A

O&W = Asset Life N & S = Lease Life

32
Q

Lessor (seller) COGS Calculation

A

N or S ONLY: Cost of Asset - Unguaranteed Residual Value = COGS in period sale

33
Q

Sale-Leaseback: Operating Lease

A

Tentative gain - PV lease pymts

34
Q

Sale-Leaseback: Capital Lease

A

Calc PV lease payments as % of FV of property: >90% Defer all, 10-90% defer up toPV pymts,

35
Q

Cap. Leaseback Amortize Deferred Gain

A

Cap. Lease in proportion to amort. Asset; Oper. Lease in propoertion to rental expense

36
Q

IFRS Leaseback Gain Rules

A

Fin/Cap. Lease = defer all/amortize over term, Oper. Lease = recognize gain now

37
Q

Debenture Bond

A

Unsecured Bond

38
Q

Bond Discount

A

Stated % less than market %, book asset

39
Q

Bond Premium

A

Stated % > Market %, Book current liability (use market % to calculate PV)

40
Q

Bond Issuance Costs Treatment

A

Reduction to carrying amount & amortized over life

41
Q

Effective Rate Amortization

A

Calculate using market % on new net carrying value

42
Q

Bond Sinking Fund

A

Non-current restricted cash, add divid/interest revenue

43
Q

Serial Bonds

A

Principal payments mature in installments; like sum of digits

44
Q

Convertible Bonds

A

(non-detachable) convert to stock; C/S & APIC Only

45
Q

Warrants (option contracts) Warrants Only

A

(Detachable) Right to buy; Bond Liab + Warrants APIC @ FV

46
Q

Warrants (option contracts) Market Value

A

(Detachable) Right to buy; Bond Liab + Warrants APIC (FV proportionate to both)

47
Q

Extinguish Bond before Maturity

A

Price = Face x % Paid minus Net Carrying Value

48
Q

Accumulated Benefit Obligation (ABO)

A

PV benefits based on current salary

49
Q

Projected Benefit Obligation (PBO)

A

PV benefits based on future salary

50
Q

SIR AGE = Net periodic pension cost

A

Income Statement = ‘+ S, + I, - R, + A, - G, + E (Book net of tax)

51
Q

+ (S) Current Service Cost

A

PV benefits earned in current period

52
Q

+ (I) Interest Cost

A

Discount rate x beginning PBO

53
Q
  • (‘R) Return on Plan Assets
A

Actual Return OR Expected Return

54
Q

+ (A) Amort. Prior Service

A

Amortize from OCI

55
Q
  • (G) Gains & Losses
A

Diff. between expected vs actual return; IF > 10% asset or PBO, amortize

56
Q

+ (‘E) Amort. Existing Net Obligation (transition)

A

Amortize over greater of 15 years or avg. life

57
Q

Pension Prior Service Cost Treatment

A

Calculate Liability book to OCI and amortizeas (A)

58
Q

Pension Fund Balance Sheet Calculation

A

Beg. (+) contributions (-) Service cost (-)Interest Cost (+) Expected Return (-) Prior service cost (+-) Gain/loss

59
Q

Funded Pensions Status

A

Fair Value - PBO

60
Q

Preferred Stock (Cumulative)

A

Declared - must pay before any common dividends

61
Q

Preferred Stock (Non-Cumulative)

A

Not decalred - lose right to dividend

62
Q

Quasi-Reorganization

A

elimit RE deficit, restate assets to FV

63
Q

Treasury Stock (Cost Method)

A

Book at repurchase cost; APIC adjusted at reissue of shares

64
Q

Treasury Stock (Par Value Method)

A

Book treas. Stock at Par + APIC; RE earnings adjusted if APIC zero

65
Q

Property Dividends

A

Convert to FV and recognize gain/loss

66
Q

Liquidating Dividends

A

In excess of RE; reduce total capital

67
Q

Stock Dividends

A

Less than 20% book @ FV; Greater than 25% book @ Par

68
Q

Compensatory Stock to EE’s

A

Value @ FV over vesting period DR: Comp Expense CR: APIC Options

69
Q

Basic Earnings per Share

A

Net Income - Preferred Divid/Weighted Avg. C/S Outstanding

70
Q

Diluted Earnings per Share

A

Basic +(add back) Int. on Conv. Securities (net of tax)/ + conv. Securities conv. to C/S

71
Q

Cash Flow Investing Activities

A

Change in non-current assets

72
Q

Cash Flow Financing Activities

A

Change in interest bearing debt & equity

73
Q

Cash Flow Paid to Suppliers

A

COGS (+) change Inv. (-) change A/P = Cash to Suppliers

74
Q

Cash Flow Required Supplemental Info

A

Interest & Taxes paid required under Indirect Method

75
Q

Cash Flow Direct Method Requirement

A

Must complete reconciliation to Operating Income

CPA - FAR (4 decks)

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