Accounting Final

  1. Tangibles?
    Has physical substance

    Land- does NOT get depreciated

    • Buildings and equiptment
    • Furniture and fixtures
  2. Intangibles?
    No Physical Substance..can't touch them

    Patents and copyrights are subject to amortization.

    Goodwill and trademarks are NOT amortized
  3. Recording costs at assets is called..?
    capitalizing the costs
  4. Depreciation Expense is found on the..?
    Income Statement

    Depreciation for the current year
  5. Accumulated Depreciation is found on the..?
    Balance Sheet

    Total of depreciation to date for an asset
  6. Book Value=?
    Original cost- Accumulated Depreciation
  7. Depreciation cost= ?
    Original cost - salvage value
  8. Straight-Line Formula=?
    (Cost- Residual Value) X 1/Useful Life = Depreciation Expense
  9. Units of Production Method= ?
    (Cost-Residual Value) X Actual Production this period/ Estimated Total Production
  10. Declining-Balance Method= ?
    (Cost-Accumulated Depreciation) X 2 / Useful Life
  11. Journal entry for depreciation?
    • dr Depreciation Expense (+E, -SE)
    • cr Accumlated Depreciation (+xA, -A)
  12. Payroll deductions?
    • Income tax
    • FICA tax
    • Other deductions (donations, union dues, etc.)
  13. Employer Payroll Taxes..
    • FICA tax (a "matching" contribution)
    • Federal unemployment tax
    • State unemployment tax
  14. General Mills receives $100,000 cash in exchange for issuing 100 bonds at their $1,000 face value, so the bonds are issued at total face value (1,000 × $1,000 = $100,000).
    • dr Cash (+A) 100,000
    • cr Bonds Payable (+L) 100,000
  15. General Mills issues 100 of its $1,000 bonds at a price of 107.26 percent of face value, the company will receive $107,260 (100 × $1,000 × 1.0726).
    • dr Cash (+A) 107,260
    • cr Bonds Payable (+L) 100,000
    • cr Premium on bonds Payable (+L) 100,000
  16. General Mills receives $93,376 for bonds with a total face value of $100,000, the cash-equivalent amount is $93,376, which represents the liability on that date. These bonds are issued at a discount because the cash received is less than the face value of the bonds.
    • dr Cash (+A) 93,376
    • dr Discount on Bonds Payable (+xL, -L) 6,624
    • cr Bonds Payable (+L) 100,000
  17. Assume that in 2000, General Mills issued $100,000 of bonds at face value. Ten years later, in 2010, the company retired the bonds early. At the time, the bond price was 103, so General Mills made a payment of $103,000.
    • dr Bonds Payable (-L) 100,000
    • dr Loss on Bond Retirement (+E, -SE) 3,000
    • cr Cash (-A) 103,000
  18. Quick Ratio= ?
    Image Upload 2

    Want the ratio high
  19. Times Interest Earned Ratio=?
    Image Upload 4

    Want the ratio to be above 1
  20. Authorized Shares: the max number of shares of capital that can be issued to the public
    Outstanding shares- shares that are owned by stockholders

    Treasury Shares- Issued shares that have been reacquired by the corporation

    Unissued shares- authorized but not yet issued
  21. Stock Issuance
    Initial Public Offering (IPO)- the first time a corporation issues stock to the public
  22. National Beverage issued 100,000 shares of $0.01 par value common stock for $10 per share.
    • dr Cash (+A) (100,000 X $10) 1,000,000
    • cr Common stock (+SE) (100,000 x %0.01) 1,000
    • cr Additional Paid-in-Capital (+SE) ($1,000,000- $1,000) 999,000
  23. Repurchase of stock
    • 1. Send a signal that the company believe its stock is undervalued
    • 2. Obtain shares to reisue for the purchase of other companies
    • 3. Obtain shares to reissue to employees as part of stock purchase or stock option plans
  24. National Beverage reacquired 50,000 shares of its common stock at $25 per share.
    • dr Treasury Stock (+xSE, -SE) 1,250,000
    • cr Cash (-A) 1,250,000
  25. National Beverage reissued 5,000 shares of the Treasury Stock at $26 per share.
    • dr Cash (+A) (5,000 X $26) 130,000
    • cr Treasury Stock (-xSE, +SE) (5,000 x $25) 125,000
    • cr Additional Paid-In-Capital (+SE) [5,000x($26-$25)] 5,000
  26. Dividends Dates
    Declaration Date- Balance sheet effects= Increase current liabilities, decrease retained earnings

    Date of Record- BS effects= No effect

    Date of Payment- BS effects= Decrease current assets (cash), decrease current liabilities
  27. National Beverage declares an $0.80 dividend on each share of its 46,000,000 shares of common stock outstanding.
    • dr Dividends Declared (+D, +SE) (46,000,000 x $0.80) 36,800,000
    • cr Dividends Payable (+L) 36,800,000
  28. Current Dividend Prefence..
    must be paid before paying any dividends to common stock
  29. Cumulative Dividend Preference..
    Any unpaid dividends from previous years must be paid before common dividends are paid
  30. Earnings Per Share (EPS)
    Net Income / Avg. # of Common shares outstanding
  31. Return on Equity (ROE)
    Net Income / Avg. Stockholders' Equity
  32. Price/Earnings (P/E)
    Current Stock Price (per share) / Earnings per share (annual)
  33. Operating
    Cash received and paid for day-to-day activities with customers, suppliers, and employees
  34. Investing
    Cash paid and received from buying and selling long-term assets
  35. Financing
    Cash received and paid for exchanges with lenders and stockholders
  36. Operating Activities..
    Inflow- Collecting from customers, receiving dividends, receiving interest

    Outflow- Purchasing services and goods for resale, paying salaries and wages, paying income taxes, paying interest
  37. Investing Activities..
    Inflows- Sale or disposal of property, plant, and equipment. Sale or maturitiy of investments in securities

    Outflows- Purchase of property, plant and equipment. Purchase of investments and securities
  38. Financing Avtivities..
    Inflows- Borrowing from lenders through formal debt contracts, Issuing stock to owners

    Outflows- Repaying principal to lenders, repurchasing stock from owners, paying cash dividends to owners
  39. Indirect Method
    Adjusts net income by eliminating noncash items
  40. Relationships to the Balance Sheet and the Income Statement
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Author
Calittlefield
ID
150611
Card Set
Accounting Final
Description
Note cards for AC210 Final
Updated