Mics Flashcards
Forward rate
forward rate is used only in forward contract. When two parties agree to exchange an asset (ex foreign currency) at a future date on a fixed price .
Spot rate
The rate of the currency the day off the transaction
Intra-period income tax allocation
Are separately allocated in the income statement in a provision for income tax expense. Effective tax rate is used for net on the gross for the continued operation , separately listed as
- discontinued operation
-continued operation
- other comprehensive income
Income statement - general and administrative expenses includes
Officers salaries expenses
Accounting and legal expenses
Insurance expenses
Rent for office space (not part of sale)
To Find COGS formula
Sales X(100%-gross profit margin %)
Gives you COGS
Find # of purchases in COGS -formula
COGS - net decrease in inventory
COGS + net increase in inventory
Gross profit % formula - in COGS
1-Gross profit/sales
2- if gross profit % is known and solving for gros profit $- gross profit % * net sales to get gross profit
Statement of changes in Equity
CPA RAT , “CPA NO rat”
Contributed Capital
Preferred & common stock
Additional Paid in Capital
Retained Earnings
Accumulated OCI
Treasure stock( contract equity) minus it
Other comprehensive income (OCI) - think of C.U.P
OCI is a part of comprehensive income
C- think of currency( foreign currency translations) & Cash flow hedges
U- think of unrealized gains or losses investments in security-available-for sale (fair value to OCI)
P- think of pension cost adjustments
Discontinue operations (in income statements) Impairment loss calc
Fair value minus the cost to sale (cost of disposal) is the NRV ( net realized value)
If NRV is less than BV- that’s a loss
If NRV is more than BV(book value) that’s a gain and recorded as the impairment loss or gain
BV- 10M
FV-8M
NRV < BV by 2M - an impairment loss x(1-Tax rate) = a (1,400,000)
Discontinued operations included net of tax - calculation
The operating income - net of tax . $ x (1-tax rate)
Impairment loss -net of tax , NRV<BV $ x(1-tax rate)
Subtract both - that equals the $ of discontinued operations
Foreign exchange transactions gain /loss calc
The the initial spot rate minus the spot rate to record for end of year income statement/date of sale and then multiply it by the #of units purchased . Purchased 10,000 units
Ex- initial purchase spot rate .55
Spot rate .70 on Dec 31. For recording this transaction, .55-.70 x 10,000=(1,500)
Date of sale use last spot rate used and do the same calculation
Accumulated depreciation is a what type account and reported in where?
Is a contra account reported in balance sheet
Non controlling interests appear in the balance sheet?
In stockholders equity
Accumulated other comprehensive income is reported in which financial statement ?
In the statement of financial position. (Aka the balance sheet)
Calculating transactions gains or losses recognized in a foreign currency is included in which statement
Component of income from continued operations in the income statement
Which statement an investor will rely on for liquidity and financial flexibility ?
Balance sheet
Realized and unrealized gains and losses for trading securities are reported in ?
In income from continuing operations
Realized, but NOT “Unrealized” gains and losses on investments in available for sale securities are reported in ?
Income from continuing operations
Accumulated other comprehensive income is where?
Owners equity account
CPA RAT (cpa no rat) is for?
CUP is for ?
1- statement of changes in equity
2- other comprehensive income
What is Note Payable?
Is a type of debt or loan, a company owes a lender, like a bank.
It’s like a written promise to pay a certain amount of money back at a specific date, and it includes interest.
Foreign transaction
Vs
Foreign translation
Foreign transaction - reported in Net Income after the gain or loss is recognized for a transaction that occurred in foreign curreny
Foreign translation- when consolidating a F/S between a parent company and subsidiary company foreign currency is translated to the company currency, gain/loss is included in OCI
Translation gain/losses are what and reported where?
They are the gain or loss that occurs after translating the F/S from its functional currency to its reporting currency.
It’s reported in other comprehensive income
