ACC 210 FINAL EXAM 8,9,10,11

Accumulated Depreciation is a debit or credit?

It is a credit. When the item is sold, to reduce it is a debit

What is amortization?

Depreciation of intangible assets: Patents

What is the DDB formula? (hint 2 steps)

1. (100% / useful life) x 2

2. book value x DDB

For partial year depreciation the amount is multiplied by:

fractions! 1/12, 6/12. 9/12

What is the book value?

cost of item - depreciation

T/F DDB is double of amount of 1 year of straight line depreciation

False queen

The book value of plant assets ____

Decreases with the passage of itme

Residual value is _____

a fixed assets estimated value over time

What is a fixed asset?

An asset you plan to use for a long time (laptop, car, etc)

T/F DDB is the only method that does NOT use residual method

True!

When you amortize something what is the journal entry?

dr) interest expense $

cr) cash $

discount $$$

If the stock dividend is less than 25% of outstanding shares it is _____

A small stock dividend

If the stock dividend is greater than 25% of outstanding shares it is a

Large stock dividend

Common stock formula

common stock = par value x stocks issued

What are the three important steps to dividends

1. date of declaration (journal entry)

2. date of record (no journal entry)

3. Date of payment (journal entry)

Contra anything is always the opposite of its original is

Example: asset —> debit

contra-asset —> credit

pls remember

A treasury stock is a

contra-equity account (debit)

What is the formula for EPS earnings per share (chapter 11)

(net income - preferred dividends) / weighted average common shares outstanding

what are arrears?

Money that is owed that should have been paid earlier

what is cumulative preferred stock?

any arrears paid to preferred stockholders before common stockholders are paid their dividends

steps for distributing cumulative preferred stock?

1. distribute dividends in arrears (if any) to preferred stocks

2. if NO dividend is declared dividend in preferred stock is considered in arrears

3. distribute current dividends to preferred stocks

4. remaining dividends go to common stockholder

how do you find dividends per share?

preferred or total common amount / amount of shares

A company cannot recognize its value when:

its trading its OWN stock

NO GAIN OR LOSS

T/F: stock dividend gives shareholders more stocks instead of cash

true! because company might not have cash

T/F: stock split divides the number of stocks already existing

True! think like a pizza

T/F for large stock dividend we use par value

true!

T/F for small stock dividend we use par value

false! we use market value

total stockholders equity should be the same after stock dividend

to find retained earnings: common stock + apic + x =stock holders equity

stockholders equity - apic - common stock = re

retained earnings can also equal

# of shares issued x market value

outstanding shares is the number of _____

stocks issued to shareholders

T/F only the company itself can purchase treasury stock

true!

treasury stock reduces assets and stockholder’s equity

TRUEEE

Common Stock Dividend Distributable is a credit _____ is a debit

stock dividend is a debit