final review idk

how to find COGS eliminated from consolidation

total amount exchanged (entire markup & inventory cost from the seller)

dividend payout ratio

dividend per share / net income per share

how to find interest expense vs. interest payable

expense: CV * market rate

payable: remaining principal * stated rate

how to find value of detachable stock warrant and bond

allocated pro rata based on market value

are stock splits and dividends (occurring after YE) factored into WACSO calculation for PY?

yes…

how to find dilutive EPS

bundle all the dilutive securities that can convert into common shares and affect the num and denom

where to put the FV markup of assets for acquisition

only in finding goodwill and then depreciating on the investment account for an equity method (the depreciation should not affect the sub’s books)

donations brain dump

time restrictions —> are restricted

purpose fulfillments —> move to unrestricted

condition fulfillments —> turn contribution into a receivable

depreciation on placed in service donations —> will move depreciation amount to unrestricted

board designated restrictions —> are unrestricted

FV of assets: PPE, intangibles, inventory, debt securities

based on principal or most advantageous market (highest and best use for PPE)

market, income, and cost approach will determine FV based on level 1, 2, 3 inputs

impairment of assets: PPE, intangibles, inventory, debt securities (HFU and HFS)

PPE: 2 step recoverability (un DCF to FV), HFS based on lesser of CV or NRV (FV - selling costs)

intangibles: 2 step recoverability (besides goodwill, which is CV down to FV)

inventory: LCM or LCNRV

debt securities: HTM based on ECL, AFS mostly based on FV (credit loss, not valuation/asset)

JE for asset impairments (PPE, intangibles, inventory)

PPE: debit impairment loss, credit accumulated depreciation

intangibles: debit impairment loss, credit intangible

inventory: debit impairment loss or COGS (immaterial), credit inventory

JE for debt security unrealized GL vs. impairments

unrealized GL: debit loss, credit valuation account

impairment: debit impairment/credit loss, credit allowance

book vs. market value method for bonds —> stock (non cash transaction to alleviate bond payable)

book: stock is recognized as the equivalent of the bond carrying amount

market: recognize G/L = market value of stock - carrying value of bond

how are proceeds on the sale of assets classified in NFP SCF?

investing CF

how are the donations for the purpose of buying fixed assets classified?

financing CF

2 assessments of reliability for govt. accounting

balanced budget (interperiod equity)

minimum disclosure (accountability)

what to do with extra incurred interest costs that aren’t capitalized (by WA AE)

expense on I/S. but WA AE can only be capitalized up to actual incurred costs

which assets are amortized and over what life?

HTM debt securities (over the life)

finance lease (based on OW NES)

intangibles (lesser of remaining useful or legal life)

franchise fees (term)

operating lease (term)

ARO JE

debit ARC, credit ARO (PV)

debit accretion expense, credit ARO (eff int)

debit dep expense, credit ARC (S-L)

lease JE

debit ROU asset, credit lease liability

finance: debit int exp, debit lease liability, credit cash (eff int)

debit amortization expense, credit accumulated depreciation/amort (S-L)

operating: debit lease expense, credit cash (S-L)

debit lease liability, credit accumulated depreciation/amort (eff int)

operating will combine interest and amortization but finance separates them

subsequent events vs. loss contingency criteria

sub event (will be specified if this is applicable): condition existing before YE & if material

loss contingency: probability and estimability (and gains cannot be accrued, but these and DOGs will be disclosed)

uncertain tax positions (based on & 2 step)

based on technical merit and if the taxing authority has all info

step 1: expected outcome at court of last resort

step 2: expected settlement with taxing authority

how should a subsidiary’s retained earnings (+ net income) look at consolidation on the date of occurrence and at year end?

sub’s RE and NI are completely eliminated

different situations for consolidation:

finding consolidated retained earnings at consolidation and YE

eliminating retained earnings at consolidation and YE

finding consolidated retained earnings at consolidation: parent

finding consolidated retained earnings at YE: parent

(this is because sub’s net income flows through to the parent’s earnings)

eliminating retained earnings at consolidation: sub

eliminating retained earnings at YE: sub + net income - dividends

do dividends affect the investment income/equity in earnings balance?

no