35% FAR 1/4 section

300,000 Interest payments are included in operating activities. Cash payment to acquire equity instruments are include in investing activities. Only payments of dividends to stockholders are included in financing activities.

Abbott Co. is preparing its statement of cash flows for the year. Abbott's cash disbursements during the year included the following: Payment of interest on bonds payable $500,000 Payment of dividends to stockholders 300,000 Payment to acquire 1,000 shares of Marks Co. common stock 100,000 What should Abbott report as total cash outflows for financing activities in its statement of cash flows?

Basic earnings per share is (Net income - Preferred stock dividends) ÷ Weighted-average common shares. $2,000,000 - (20,000 × $100 × 0.10) ÷ 200,000 = $9.00

Jen Co. had 200,000 shares of common stock and 20,000 shares of 10%, $100 par value cumulative preferred stock. No dividends on common stock were declared during the year. Net income was $2,000,000. What was Jen's basic earnings per share?

before taking out the gain from discontinued operations, you need to take out the income taxes first. discontinued operations - the gain from disposal should be reported net of tax savings , and then subtracted from income continuing operations. then you will get net income you will get taxed on the income before income taxes and then you will tax the gain from disposal

net income tax expense application gross sales - sales returns = net sales - cost of goods sold = gross profit - selling admin exp = operating income + gain on sale on sale of investment in equity securities - provision for income taxes

balance sheet assets, liabilities, net assets (net assets = residual interest)

statement of financial position? think

used to value acquisitions of PPE

what uses Historical cost?

95,000 restricted 100000*0.05 = 5000 100,000 restricted - 5000 uncollectible = 95000

200,000 designated by donors for use in the current year. 100,000 designated for use in the second year. estimated 5% of the contribution will be uncollectible. What amount should Foxx report as restricted support (contributions) in the statement of activities for the current year?

average collection period for its accounts receivable? you need accounts receivable turnover, and then divide 365 days by the turnover. net credit sales / avg a/r = turnover times per year 3,000,000 / (100k + 400k)/2 = 12 times a year 365 / 12 = 30.0 days

Kline Co. had the following sales and accounts receivable balances at the end of the current year: Cash sales $1,000,000 Net credit sales 3,000,000 Net accounts receivable, 1/1 100,000 Net accounts receivable, 12/31 400,000 What is Kline's average collection period for its accounts receivable?

155000 Beg A/R + sales - collections = ending A/R 50,000 +sales - 175,000 = 30,000 ending A/R sales = 155,000

Reid Partners, Ltd., which began operations on January 1, 20X1, has elected to use cash-basis accounting for tax purposes and accrual-basis accounting for its financial statements. Reid reported sales of $175,000 and $80,000 in its tax returns for the years ending December 31, 20X2 and 20X1, respectively. Reid reported accounts receivable of $30,000 and $50,000 in its balance sheets as of December 31, 20X2 and 20X1, respectively. What amount should Reid report as sales in its income statement for the year ending December 31, 20X2?

notes to the financial statements

SFAC 8 talks about - objectives of financial reporting - notes to financial statements - qualitative characteristics of financial reporting - elements of financial statements

- completeness - neutrality - free from error

faithful representation components (primary)

beg retained earnings + 20x1 net income - 20x1 dividends = retained earnings 12/31 (given = 51,000 Dallas Inc the parent, includes 100% of Styles' earnings: 20,000. The NCI in the subsidiary net income = 4,000 (20% x 20,000) is then subtracted from the combined entity's consolidated net income to derive the parent's interest in consolidated net income.

how to calc net income from retained earnings and dividends

restricted net realizable value

promise contributions should be classified as ___ and be measured at _____

- comparability - verifiability - timeliness - understandability cuvt

qualitative characteristics of useful financial information that ENHANCE the usefulness of information that is relevant and faithfully represented

- materiality - confirmatory value - predictive value

relevance components (primary)

add up all the assets (a/r, buildings, inventory) subtract accum deprec. subtract all the liab (mortgage, a/p) = net book value of 1,000,000. subtract the sale proceeds at cost = 800,000 (1mil > 800k) = 200,000 loss. take out taxes = 200,000*(1-0.3) = after tax loss of 140,000.

to calc the after tax loss from the discontinued operation (when the division was sold for 800k) and the tax rate is 30%

Total separate revenues - consolidated revenues = revenues eliminated in consolidation 680000-616000=64000 Since intercompany sales are eliminated in the consolidation process, the 64000 eliminated represents intercompany sales from Pare to Shel.

what amount of intercompany sales from Pare to Shel during 20x1?

liquidation values generally are used when liquidation of an entity is imminent

what uses potential proceeds from liquidation sale?

redoing the total by absolute value and divide each segment by the total with the absolute value

when doing the profit and loss test, take the absolute value of the segments and gain a new total to divide each potential segment by:

770,000 700,000 + 80,000 +50,000 - 60,000 = 770,000 these net assets released from restrictions reduce net assets with donor restrictions and increase net assets without by 60,000.

A voluntary health and welfare entity received a $700,000 permanent endowment during the year. The donor stipulated that the income and investment appreciation be used to maintain its senior center. The endowment fund reported a net investment appreciation of $80,000 and investment income of $50,000. The organization spent $60,000 to maintain its senior center during the year. What amount of change in net assets with donor restrictions should the organization report as a result of these transactions?

the entity as a whole FASB ASC states that the statement of financial position "shall focus on the NFP entity as a whole" and shall report the amounts of its total assets, liabilities, net assets, total net assets with donor restrictions, and total net assets without donor restrictions.

According to the FASB Accounting Standards Codification, the financial statements of a not-for-profit entity focus on: - the entity as a whole. - standardization of funds nomenclature. - inherent differences of not-for-profit entities that impact reporting presentations. - distinctions between current fund and noncurrent fund presentations.

250 dividends paid -300 proceeds from the issuance of CS +250 borrowings under a line of credit +200 (they received cash) proceeds from the issuance of convertible bonds +100 net increase from financing activities = 250 The proceeds from the sale of a building are included in investing activities.

A company is preparing its year-end cash flow statement using the indirect method. During the year, the following transactions occurred: Dividends paid $300 Proceeds from the issuance of common stock 250 Borrowings under a line of credit 200 Proceeds from the issuance of convertible bonds 100 Proceeds from the sale of a building 150 What is the company's increase in cash flows provided by financing activities for the year?

125000 / (15000*9/12) + (12500*2/12)+(17000*7/12) = 7.94

Ian Co. is calculating earnings per share amounts for inclusion in Ian's annual report to shareholders. Ian has obtained the following information from the controller's office as well as shareholder services: Net income from January 1 to December 31 $125,000 Number of outstanding shares: January 1 to March 31 15,000 April 1 to May 31 12,500 June 1 to December 31 17,000 In addition, Ian has issued 10,000 incentive stock options with an exercise price of $30 to its employees and a year-end market price of $25 per share. What amount is Ian's diluted earnings per share for the year ended December 31?

net assets without donor restrictions 0, net assets with donor restrictions 2500. The donation was earmarked for a specific purpose. As of the date of the statement of financial position for 20x3, the unspent donation amounted to 2500 that would be reflected in net assets with donor restrictions. the 20x3 supplies purchase and use of supplies would be reported in the statement of activities as both an increase at the time of purchase (reclassification from net assets with donor restrictions to net assets without donor restrictions) and a decrease (expense) at the time of use with a 0 net effect on net assets without donor restrictions by the end of 20x3.

In 20X1, Wildlife Rescue, a not-for-profit entity that works with injured wild animals, received donations of $5,200 for supplies. In 20X2, $600 was spent for this purpose and another $2,100 was spent and all supplies used by the end of 20X3. What should Wildlife Rescue report in the statement of financial position for 20X3 regarding the donation? Net assets without donor restrictions $0, net assets with donor restrictions $0 Net assets without donor restrictions $600, net assets with donor restrictions $2,100 Net assets without donor restrictions $0, net assets with donor restrictions $2,500 Net assets without donor restrictions $2,700, net assets with donor restrictions $2,500

250000 The single-step income statement presents all revenue and gains in the upper part of the statement. Purchase discounts are shown as deductions in the expense section. Recovery of accounts written off has no effect on the income statement since cash is increased and allowance for doubtful accounts is decreased.

In Dart Co.'s Year 2 single-step income statement, as prepared by Dart's controller, the section titled "Revenues" consisted of the following: Sales $250,000 Purchase discounts 3,000 Recovery of accounts written off 10,000 Total revenues $263,000 In its Year 2 single-step income statement (statement of profit or loss), what amount should Dart report as total revenues?

a statement of net assets available for benefits of the plan and a statement of changes in net assets available for benefits

What are the two required financial statements of a defined contribution retirement plan? - A statement of financial position and a statement of activities - A statement of fiduciary net assets and a statement of changes in fiduciary net assets - A statement of net assets available for benefits of the plan and a statement of changes in fiduciary net assets - A statement of net assets available for benefits of the plan and a statement of changes in net assets available for benefits

EXPECTED annual income tax rate

What tax rate do you use to file interim financial statements? - effective income tax rate - effective annual income tax rate previous year - expected effective annual tax rate for current year - statutory tax rate for current year

discontinued operations

Which of the following items are reported net of tax? - Unusual or infrequent gains and losses classified as "other revenue and expense" - The additional amount of bad debts expense reported due to an increase in the percentage used to estimate bad debts expense this year - Discontinued operations - The amount of the difference between cost of goods sold caused by a change in the current year from the average cost method to the FIFO method

545000 Regardless of whether the direct or indirect method is used to determine cash flows from operating activities, the following items are required to be disclosed: Amount of income taxes paid during the period (325,000) amount of interest paid during the period (220,000) = total = 545,000

Tam Co. reported the following items in its year-end financial statements: Capital expenditures $1,000,000 Sales-type lease payments 125,000 Income taxes paid 325,000 Dividends paid 200,000 Net interest payments 220,000 What amount should Tam report as supplemental disclosures in its statement of cash flows prepared using the indirect method?

Program function 6000, fundraising function 4000, general 0 they have to be classified separately

How should combined program functions and fundraising functions for 10,000 costs incurred be shown on the statement of activities?

short-term obligations that are paid with cash before the balance sheet is released to the public can be refinanced and reclassified as long term. Short-term obligations intended to be refinanced cannot be reclassified as noncurrent if they are paid with current assets prior to the actual refinancing or a new refinancing agreement being agreed upon. The payment of cash would represent a settlement of the short-term obligation, not a refinancing. All of the other answer choices are correct.

Which of the following statements about the refinancing of short-term obligations is incorrect? - The ability to refinance the short-term obligations is a required criterion to reclassify current liabilities as long term. - The amount that can be refinanced is limited to the amount actually refinanced or the amount specified in a refinancing agreement even though an actual refinancing did not occur. - Short-term obligations that are paid with cash before the balance sheet is released to the public can be refinanced and reclassified as long term. - The intent to refinance the short-term obligations is a required criterion to reclassify current liabilities as long term.

Form 10-K within 60 days after the end of the reporting period 10-K annual = 60 days for large accelerated filers 10-Q quarterly = 40 days for large accelerated filers large accelerated filers = >700 million

A U.S. public company with a worldwide public float of $800 million at the end of the second quarter of the fiscal year is required to file its annual report with the U.S. SEC on: Form 10-Q within 40 days after the end of the reporting period. Form 10-Q within 45 days after the end of the reporting period. Form 10-K within 60 days after the end of the reporting period.

Revenues 80,000 - operating expenses - income tax expense = net income 20,000 Foreign currency translation adjustment gain is an item of other comprehensive income and is included in comprehensive income, BUT NOT net income. OCI is reported as a direct charge or credit to equity. Net income or loss for an accounting period is determined by matching realized revenues with those expenses and expired costs necessary to generate the related revenue. Revenues are inflows of assets or settlements of liabilities, during a period, from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations. Expenses are outflows of assets or incurrences of liabilities, during a period, from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations, and include Operating Expenses and Income Tax Expense. Net income is $20,000 ($80,000 − $50,000 − $10,000).

A partial listing of a company's accounts is presented below: Revenues $80,000 Operating expenses 50,000 Foreign currency translation adjustment gain,net of tax 4,000 Income tax expense 10,000 What amount should the company report as net income?

using the fair value at the date of the financial statements The equity portfolio should be valued in the college's year end financial statements 3 years after the donation at FV at the date of the statements. Donated equity securities with readily determinable market values are reported at market value, the length of the holding period is irrelevant.

A portfolio of equity securities that are traded on a national exchange is donated to a private, not-for-profit college as an endowment fund. How should the equity portfolio be valued in the college's year-end financial statements three years after the donation? - Using the donor's original cost basis Using the fair value at the time of donation - Using fair value at the date of the financial statements - Using the lower of fair value at donation and fair value at the date of the financial statements

they can results from revenues or investment by owners SFAC 6, Elements of Financial Statements, defines gains as "increases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from revenues or investments by owners." Because gains are distinct from revenues, transactions that result in revenues are not gains. Investments by owners are contributions, not gains.

According to the FASB conceptual framework, which of the following is not an essential characteristic of a gain? There is an increase in net assets. They can result from all other transactions and other events and circumstances affecting an entity. They can result from peripheral or incidental transactions. They can result from revenues or investment by owners.

neither assets nor liabilities Valuation accounts are a separate item that reduces or increases the carrying amount of an asset is sometimes found in financial statements. For example, an estimate of uncollectible amounts reduces receivables to the amount expected to be collected, or a premium on a bond receivable increases the receivable to its cost or present value. Those "valuation accounts" are part of the related assets and are neither assets in their own right or liabilities.

According to the FASB's conceptual framework, asset valuation accounts are: assets. neither assets nor liabilities. part of stockholders' equity. liabilities.

accruals are concerned with expected future cash receipts and payments, while deferrals are concerned with pas cash receipts and payments. accrued items represent economic events that have already occurred, such as expenses, but have no yet been settled or paid. Deferrals represent items that have been settled or paid for in advance, but their associated underlying economic event has not yet occurred.

Accrual accounting involves accruals and deferrals. Which of the following best describes accruals and deferrals?

the statement of financial position aka the balance sheet OCI is transferred to accumulated other comprehensive income each period. AOCI is reported as part of EQUITY ON THE BALANCE SHEET / STATEMENT OF FINANCIAL POSITION

Accumulated other comprehensive income is reported in which of the following financial statements? The income statement The statement of comprehensive income The statement of cash flows The statement of financial position

30100 Comprehensive includes net income + OCI. OCI includes pension-related items like the implementation of prior service costs and gains and losses on the effective portion of cash flow hedges as was as unrealized holding gains or losses on AFS debt securities. IMPAIRMENT LOSSES ARE ALREADY INCLUDED IN NET INCOME. net income = 39,000 - prior service costs related to a pension plan (17000) + 8100 gain on effective portion of cash flow hedge = 30,100

Albany Co. has net income of $39,000, $17,000 of prior service costs related to amendments implemented in their pension plan, a gain of $8,100 on the effective portion of a cash flow hedge, and an impairment loss of $6,000 on an intangible asset. What amount is Albany's comprehensive income?

quoted market prices Investments in debt securities should be reported at MARKET PRICES bcs that is the source of readily available fair value information. Discounted expected future cash flows are required to value financial assets for which there is no market that can provide fair value information.

At which of the following amounts should a nongovernmental not-for-profit entity report investments in debt securities? - Potential proceeds from liquidation sale - Discounted expected future cash flows - Quoted market prices - Historical cost

the availability of expenses by both functional and natural classifications NFPs must disclose the availability of financial assets to meet cash needs for general expenditures within one year as part of their quantitative disclosures. Additional quantitative note disclosures include information about the availability of financial assets due to their nature (i.e. their liquidity); external limits imposed by donors, laws, and contracts; and internal limitations. An analysis of expense by both functional and and natural classifications can be disclosed either in the notes or on the face of the statement of financial position.

As part of the required quantitative disclosures, NFPs must disclose the availability of financial assets to meet cash needs for general expenditures within one year. Additional quantitative disclosures are required to be included in the notes. Which of the following is not one of those note disclosures? - External limits imposed by donors - Internal limitations - An analysis of expenses by both functional and natural classifications - The availability of financial assets due to their nature

200,000 + (40,000*9/12) = 230,000 230,000+(230,000*0.5) - (10,000*3/12) = 342,500 *remember stock dividends are treated as if they happened at the beginning of the year, so we dont have to weigh them.*

At the beginning of the year, Stam Co. had 200,000 shares of common stock issued and outstanding. On March 31, the company issued 40,000 additional shares. On July 1, it declared and distributed a 50% stock dividend and on September 30 repurchased 10,000 shares as treasury stock. What amount of shares should Stam use to calculate basic earnings per share?

600,000 + 300,000+ 1,350,000 -150,000 - 900,000 = 1,250,000

At the end of year 1, a defined benefit pension plan reported net assets available for benefits of $650,000. During year 2, the following items were recorded: Investment income $ 300,000 Contributions 1,350,000 Administrative expenses 150,000 Benefits paid directly to participants 900,000 What amount should the plan report as year-end net assets available for benefits in the year 2 statement of changes in net assets available for benefits?

Babcock must have a signed agreement from Mendenhall to report the items in an offsetting manner. Generally, the offsetting of assets and liabilities in the balance sheet is improper unless a right of setoff exists. The 4 criteria to establish a right of setoff that permits a firm to report items in an offsetting manner are: - each of the 2 parties owes the other determinable amounts - the reporting party has the right to set off the amount owed with the amount owed by the other party - the reporting entity intends to set off, and - the right of setoff is enforceable by law YOU DONT NEED A SIGNED AGREEMENT

Babcock Company owes $50,000 to Mendenhall Corporation. Babcock also has an account receivable from Mendenhall of $45,000. Babcock wants to offset these items and report a net payable of $5,000 in their balance sheet. Which of the following is not required for Babcock to report these items in this manner? - Babcock has the right to set off the amount owed with the amount owed by the other party. - Babcock must have a signed agreement from Mendenhall to report the items in an offsetting manner. - Babcock's right to offset the items is enforceable by law. - The amounts owed by Babcock and - Mendenhall to each other are clearly determinable.

10000 + 30,000 *9/12 + 36,000 *7/12 = 143500 *1.05 (stock dividend) = 150,675 - 35,000 *4/12 = 139,008 yes, you have to weigh the treasury stock acquired

Balm Co. had 100,000 shares of common stock outstanding as of January 1. The following events occurred during the year: 4/1: Issued 30,000 shares of common stock 6/1: Issued 36,000 shares of common stock 7/1: Declared a 5% stock dividend 9/1: Purchased as treasury stock 35,000 shares of its common stock. Balm used the cost method to account for the treasury stock. What is Balm's weighted average of common stock outstanding at December 31?

net assets without donor restrictions Management & general expenses are reported in a separate functional classification from program expenses. They are shown as expenses and not as an offset to revenues. All expenses in the statement of activities are classified as changes in net assets without donor restrictions.

Birdlovers, a not-for-profit community foundation, incurred $5,000 in management and general expenses in 20X1. In Birdlovers statement of activities for the year ended December 31, 20X1, the $5,000: is presented as a program expense. decreases net assets without donor restrictions. decreases net assets with donor restrictions. is presented as a contra account offsetting revenue and gains.

accrued expenses The cash basis of accounting, as compared to accrual basis accounting, as compared to accrual-basis accounting, will understate income when accrued expense decrease because that decrease must have been the result of paying out more cash than expenses incurred. A decrease in accts receivable would have the opposite effect. This decrease would occur as more cash was collected than sales made, producing a higher

Compared to the accrual basis of accounting, the cash basis of accounting understates income by the net decrease during the accounting period of:

accrued expenses The cash basis of accounting, as compared to accrual-basis accounting, will understate income when accrued expenses decrease because that decrease must have been the result of paying out more cash than expenses incurred. A decrease in accounts receivable would have the opposite effect. This decrease would occur as more cash was collected than sales made, producing a higher cash basis income. In summary, cash basis income is: - higher when accounts receivable decrease - lower when accrued expenses decrease

Compared to the accrual basis of accounting, the cash basis of accounting understates income by the net decrease during the accounting period of: accounts receivable. accrued expenses. both accounts receivable and accrued expenses. neither accounts receivable nor accrued expenses.

Unrestricted revenue = 975,000 Restricted revenue = 500,000 A NFP entity should distinguish between contributions received with and without restrictions. The foundation should report unrestricted revenue of 975,000. This is the 875,000 contribution as well as the 100,000 in contributed services. The value of volunteer services is recognized as contributions insofar as the services require specialized skills, were provided by persons possessing those skills, and would typically have been purchased if not provided by donation. A promise to contribute a specified amount to an organization should be recorded as INCOME IMMEDIATELY upon receipt of the promise. Because the promised contribution (500,000) will not be collected until the subsequent year. It should be considered restricted. Because the promised contribution is expected to be collected within 1 year of financial statement date, it may be measured at net realizable value.

During 20X1, Jones Foundation received the following support: A cash contribution of $875,000 to be used at the board of directors' discretion A promise to contribute $500,000 in 20X2 from a supporter who has made similar contributions in prior periods Contributed legal services with a value of $100,000, which Jones would have otherwise purchased At what amounts would Jones classify and record these transactions?

when envoy classifies it as held for sale Discontinued operations are presented in a separate section of the income statement after income from continuing operations. The discontinued operations section reflects the results of operations of an entity that is classified for sale or has actually been disposed of.

Envoy Co. manufactures and sells household products. Envoy experienced losses associated with its small appliance group. Operations and cash flows for this group can be clearly distinguished from the rest of Envoy's operations. In a strategic shift, Envoy plans to sell the small appliance group with its operations. What is the earliest point at which Envoy should report the small appliance group as a discontinued operation? - When Envoy classifies it as held for sale - When Envoy first sells any of the assets of the segment - When Envoy receives an offer for the segment - When Envoy sells the majority of the assets of the segment

revenues, expenses,, gains, losses, net income or loss and OCI are reported in the consolidated financial statements at the consolidated amounts, which include the amounts attributable to the owners of the parent and the noncontrolling interest. **must be on the face of the consolidated statement of income** (no separate disclosure, no separate disclosure in the footnotes)

FASB ASC 810-10-45-19 requires that the consolidated amounts of these items (revenues, expenses, gains, losses, net income or loss, and other comprehensive income) be reported on the income statement. The amount of consolidated net income attributable to the parent and to the noncontrolling interest must be clearly identified and presented on the face of the consolidated statement of income.

47000+20000+x = 50000 ending x = 17000 bonds redeemed in 20x2

Fara Co. reported bonds payable of $47,000 on December 31, 20X1, and $50,000 on December 31, 20X2. During 20X2, Fara issued $20,000 of bonds payable in exchange for equipment. There was no amortization of bond premium or discount during the year. What amount should Fara report in its 20X2 statement of cash flows for redemption of bonds payable?

nature of primary activities Many financial statement line item explanations, such as local denomination demand deposits, do not require further explanatory information. However, other line items require varying degrees of disclosure. A summary of potential additional disclosures is as follows: For assets: the nature, quality, and location; future cash flows; relation to other line items; and significant contractual, statutory, regulatory, or judicial restrictions. For assets and liabilities resulting from financial instruments or other contracts: contractual or legal terms (e.g., timing of receipts and disbursements), degree of credit or nonperformance risk, potential effect related to inability to pay or perform, and method used to determine the cash flows. Other disclosures could include equity instrument terms or conditions, potential effects of changing accounting methods, breakdown of aggregated line items, alternative measurements, and the line item's relation to other line items.

Financial statement line item explanations which may require additional information for full disclosure purposes include all of the following except: - degree of credit or nonperformance risk. - potential effect related to inability to perform or pay. - line item relation to other line items. - nature of primary activities.

60000 Cash flows from investing activities involve the use and receipt related to nonoperating assets (PPE, equity and debt securities, notes receivable, etc.). Cash provided by investing activities is found in an identical manner under the direct or indirect method of preparing the statement of cash flows. In this example, only 2 items would be classified as investing activities. The equipment purchase and the equipment sale. The sale resulted in a 100,000 cash inflow and the purchase resulted in a 40000 cash outflow, for a net cash provided amount 60,000. (100,000 inflow (sale price) - 40000 outflow). The change in accounts receivable and accounts payable balances would be captured in the operating section of the statement of cash flows. The change in notes payable would be captured in the financing section.

Glass Co. had net income of $70,000 during the year. Depreciation expense was $10,000. The following information is available: Accounts receivable increase $20,000 Equipment gain on sale (sale price $100,000) 10,000 increase Nontrade notes payable increase 50,000 Equipment purchases 40,000 increase Accounts payable increase 30,000 What amount should Glass report as net cash provided by investing activities in its statement of cash flows for the year?

as a refundable advance In this case, the donor has provided resources to G Uni before the conditions attached to the donation, the raising of matching funds, has been met. Restricted and Unrestricted support are not correct because the contribution cannot be recognized as support (revenue) until conditions have been met. As a memorandum entry reported in the footnotes is incorrect because te cash received must be recorded in the books and records. As a refundable advance, considering the conditional advance as a liability called "refundable advance" is the only correct answer.

Gridiron University is a private university. A successful alumnus has recently donated $1,000,000 to Gridiron for the purpose of funding a "center for the study of sports ethics." This donation is conditional upon the university raising matching funds within the next 12 months. The university administrators estimate that they have a 50% chance of raising the additional money. How should this donation be accounted for? - As restricted support As unrestricted support As a refundable advance As a memorandum entry reported in the footnotes

Yes The modified cash basis, as the name implies, is a combination of the cash basis and the accrual basis. The modified cash basis is acceptable & is regularly used by professional service companies. The cash basis is modified for items that have substantial support, such as recording income tax expense in the year in which the income was earned & capitalizing the purchase of assets even though cash was paid for the asset. The modifications must be logical & applied consistently.

Hahn Co. prepared financial statements on the cash basis of accounting. The cash basis was modified so that an accrual of income taxes was reported. Are these financial statements in accordance with the modified cash basis of accounting? - Yes - No, because the modifications are illogical - No, because there is no substantial support for recording income taxes - No, because the modifications result in financial statements equivalent to those prepared under the accrual basis of accounting

(500,000) The losses from a discontinued segment that qualifies as a component are reported in the period they occur. An anticipated loss on sale should be recognized by writing the component down to FMV. An anticipated gain on sale of the component should not be recognized until the day of the sale. loss 01/01/x1 - 9/30/x1 = (200,000) loss 10/01/x1 - 12/31/x1 = (300,000) = total loss x1 = (500,000) In a period in which a component of an entity either has been disposed of or is classified as held for sale, the income statement of a business entity or statement of activities of a NFP for current & prior periods shall report the results of operations of the component, including any gain or loss recognized in discontinued operations.

Host Co. has adopted FASB ASC 205-20 (Presentation of Financial Statements—Discontinued Operations). On October 1, 20X1, in a strategic shift, Host Co. approved a plan to dispose of a segment of its business. Host expected that the sale would occur on April 1, 20X2, at an estimated gain of $350,000. The segment had actual and estimated operating losses as follows: 01/01/X1 to 09/30/X1 $(300,000) 10/01/X1 to 12/31/X1 (200,000) 01/01/X2 to 03/31/X2 (400,000) Assuming that the segment qualified as a component under FASB ASC 205-20-45, in its 20X1 income statement, what should Host report as a loss from operation of a discontinued segment?

included in net income & disclosed in the notes to interim financial statements Discontinued operations should be reported separately, net of tax, on the income statement for the interim period. Disclosure in the notes to the interim statements is required.

How are discontinued operations that occur at midyear initially reported? - Disclosed only in the notes to the year-end financial statements - Included in net income and disclosed in the notes to the year-end financial statements - Included in net income and disclosed in the notes to interim financial statements - Disclosed only in the notes to interim financial statements

Unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in net assets WITHOUT donor restrictions. Investment gains and losses are reported as unrestricted revenues in the statement of activities unless the donor of the principal investment amount has explicitly instructed otherwise. The statement of activities is focused on clarifying whether revenues are unrestricted or restricted so gains may or may not be netted for presentation, and gains may or may not be reported net of expenses.

How should a nongovernmental not-for-profit entity classify gains and losses on investments purchased with net assets with donor restrictions? - Gains may not be netted against losses in the statement of activities. - Gains and losses can only be reported net of expenses in the statement of activities. - Unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in net assets without donor restrictions. - Unless explicitly restricted by donor or law, gains and losses should be reported in the statement of activities as increases or decreases in net assets with donor restrictions.

at fair value FASB requires that an employee benefit plan report its net assets at fair value.

How should plan investments be reported in a defined benefit plan's financial statements? - at actuarial present value - at cost - at net realizable value - at fair value

in operating activities as an addition to income

How should the amortization of bond discount on long-term debt be reported in a statement of cash flows prepared using the indirect method? As a financing activities inflow As a financing activities outflow In operating activities as a deduction from income In operating activities as an addition to income

contributions receivable, valued at their present values Unconditional contributions receivable expected to be collected over more than 1 year should be valued using present discounted value techniques & appropriate assumptions. The contributions receivable are valued at present values, not future values. The contributions should be recognized as revenue in the period they are made and not deferred.

How should unconditional promises to give received by a nongovernmental not-for-profit entity that will be collected over more than one year be reported? Contributions receivable, valued at the amount promised Long-term contributions receivable, valued at the expected collection amount Deferred revenue, valued at present value Contributions receivable, valued at their present values

stockholders equity of the parent = common stock + APIC + retained earnings + 20% (they have 80%) of the total stockholders' equity of sub CS + APIC + retained earnings = total SE

How to calc total stockholders' equity in the parent's consolidated balance sheet?

included in the expense category in the determination of income Taxable income is an amount resulting from the application of tax rules governing revenues and expenses. Some revenues/expense are specifically excluded or subjected to limitation. When determining net income using the income-tax basis, a fair determination necessitates using the nondeductible (for taxes) portion of expenses (such as meals and entertainment) as long as they are legitimate business expenses.

In financial statements prepared on an income-tax basis, how should the nondeductible portion of expenses, such as meals and entertainment, be reported? - Excluded from the financial statements - Included in a separate category in the determination of income - Excluded from the determination of income, but included in the determination of retained earnings - Included in the expense category in the determination of income

recognize certain revenues and expenses in different reporting periods. Both income tax-bases and GAAP-basis financial statements recognize all of the financial activities of a company's business. However, it is the timing of this recognition that differs between the 2 methods. For income tax-basis financial statements, taxable revenues and tax-deductible expenses are recognized in the financial statements in the same period they are reported in the tax return. For financial statements.

Income tax-basis financial statements differ from those prepared under GAAP in that income tax-basis financial statements: - do not include nontaxable revenues and nondeductible expenses in determining income. - include detailed information about current and deferred income tax liabilities. - contain no disclosures about finance and operating lease transactions. - recognize certain revenues and expenses in different reporting periods.

recognize certain revenues and expenses in different reporting periods. Both income tax-basis and GAAP-basis financial statements recognize all the financial activities of a company's business. However, it is the timing of this recognition that differs between the 2 methods. For income tax-basis financial statements, taxable revenues & tax-deductible expenses are recognized in the financial statements in the same period they are reported in the tax return. For financial statements prepared in accordance with GAAP, all revenues and expenses are recognized using the accrual method of accounting.

Income tax-basis financial statements differ from those prepared under GAAP in that income tax-basis financial statements: - include detailed information about current and deferred income tax liabilities. - recognize certain revenues and expenses in different reporting periods. - do not include nontaxable revenues and nondeductible expenses in determining income. - contain no disclosures about finance and operating lease transactions.

10,000 100,000*10% = 10,000 NCI Intercompany dividends are eliminated in consolidation. The only dividends that remain after the eliminating entries are dividends paid to noncontrolling shareholders: 10% of Fund 's dividend of 100,0000 or 10,000

Jane Co. owns 90% of the common stock of Dun Corp. and 100% of the common stock of Beech Corp. On December 30, Dun and Beech each declared a cash dividend of $100,000 for the current year. What is the total amount of dividends that should be reported in the December 31 consolidated financial statements of Jane and its subsidiaries, Dun and Beech?

23,000 (foreign currency translation gain) OCI includes items such as gains and losses on foreign currency translation, gains and losses on derivative instruments, gains or lossses associated with pension or other postretirement benefits, and unrealized holding gains or losses on available for sale debt securities.

Lando Company had the following items: Service revenue $64,000 Gain on early extinguishment of bonds 41,000 Realized loss on sale of equipment 76,000 Foreign currency translation gain 23,000 Loss on impairment of building 9,500 Which of the following amounts would the statement of comprehensive income report as other comprehensive income or loss?

Assets = liabilities + equity 120,000 liabiltiies given equity calc: issuance of stock 1/1/x0 = 750,000 + revenues - expenses - declaration of cash dividend = equity 765,000 765,000 + 120,000 = 885,000

Mirr, Inc., was incorporated on January 1, 20X0, with proceeds from the issuance of $750,000 in stock and borrowed funds of $110,000. During the first year of operations, revenues from sales and consulting amounted to $82,000, and operating costs and expenses totaled $64,000. On December 15, 20X0, Mirr declared a $3,000 cash dividend, payable to stockholders on January 15, 20X1. No additional activities affected owners' equity in 20X0. Mirr's liabilities increased to $120,000 by December 31, 20X0. On Mirr's December 31, 20X0, balance sheet (statement of financial position), total assets should be reported at:

the amount of joint costs for each kind of joint activity NFP that allocate joint costs are encouraged, but not required, to disclose the amount of joint costs for each kind of joint activity, if practical. They must disclose the following in the notes to the financial statements: - the types of activities for which joint costs have been incurred - a statement that such costs have been allocated - the total amount allocated during the period & the portion allocated to each functional expense category

NFPs that allocate joint costs disclose all of the following in the notes to the financial statements except: - the types of activities for which joint costs have been incurred. - a statement that such costs have been allocated. - the total amount allocated during the period and the portion allocated to each functional expense category. - the amount of joint costs for each kind of joint activity.

temporary or permanent Donor restrictions are no longer listed as either temporary or permanent. Appropriate disclosures for restrictions on donations include support for a particular operating activity, investment for a specified term, use in a specified period, and or acquisition of long-lived assets.

Not-for-profit entities must disclose the types of donor restrictions. Which of the following is not an example of a type of restriction? - Support for a particular operating activity - Acquisition of long-lived assets - Investment for a specified term - Temporary or permanent

40000 the amount of gain recognized needs to be net of operating losses. gain from sale of assets = 90,000 - operating loss 50,000 = gain from disposal of component to be reported = 40,000 Note: the disposal of the frozen food division qualifies as a disposal of a component of the company. Consequently, the disposal of the division represents a strategic shift & must be reported on the income statement as discontinued operations in the period in which the disposal occurs.

On February 2, in a strategic shift, Flint Corporation's board of directors voted to discontinue operations of its frozen food division and to sell the division's assets on the open market as soon as possible. The division, which qualifies as a component under FASB ASC 205-20, reported net operating losses of $20,000 in January and $30,000 in February. On February 26, sale of the division's assets resulted in a gain of $90,000. What amount of gain from disposal of a component should Flint recognize in its income statement for the three months ended March 31?

20000 retained earnings 36000 + net income x - dividends (5000) = retained earnings 51000 Dallas, the parent, includes 100% of Style's earnings = 20000. The NCI in the subsidiary net income 4000 (20% of 20000) is then subtracted from the combined entity's consolidated net income to derive the parent's interest in consolidated net income.

On January 1, 20X1, Dallas, Inc., purchased 80% of Style, Inc.'s, outstanding common stock for $120,000. On that date, the carrying amounts of Style's assets and liabilities approximated their fair values. During 20X1, Style paid $5,000 cash dividends to its stockholders. Summarized balance sheet information for the two companies follows: Dallas Style12/31/X1 12/31/X1 01/01/X1Investment in Style (equity method) $132,000 Other assets 138,000 $115,000 $100,000 Common stock 50,000 20,000 20,000 Additional paid-in capital 80,250 44,000 44,000 Retained earnings 139,750 51,000 36,000 The combination is accounted for as an acquisition. What amount should Dallas include from Style as part of consolidated net income in its 20X1 income statement?

1,240,000 we only include the retained earnings for the PARENT on the consolidated balance sheet. Remember we carried over that amount when we are doing consolidations. In accounting for business combinations, the stockholders' equity of the acquired entity is eliminated against the investment account. As a results, the consolidated retained earnings include only the retained earnings of the parent company. Thus, the owen corp consolidated balance sheet on dec 31, 20x1, would show a retained earnings amount of 1,240,000.

On January 1, 20X1, Owen Corp. purchased all of Sharp Corp.'s common stock for $1,200,000. On that date, the fair values of Sharp's assets and liabilities equaled their carrying amounts of $1,320,000 and $320,000, respectively. During 20X1, Sharp paid cash dividends of $20,000. Selected information from the separate balance sheets and income statements of Owen and Sharp as of December 31, 20X1, and for the year then ended follows: Owen Sharp BALANCE SHEET ACCOUNTS Investment in subsidiary $1,300,000 ---Retained earnings 1,240,000 560,000Total stockholders' equity 2,620,000 1,120,000INCOME STATEMENT ACCOUNTSOperating income 420,000 200,000Equity in earnings of Sharp 120,000 ---Net income 400,000 140,000 In Owen's December 31, 20X1, consolidated balance sheet, what amount should be reported as total retained earnings? $1,240,000 $1,360,000 $1,380,000 $1,800,000

the degree of nonperformance risk SFAC 8 provides a summary of potential additional disclosures. For assets, the following items should be disclosed: the nature, quality, and location of the asset; future cash flows; relation to other line items; and significant contractual, statutory, regulatory, or judicial restrictions. The degree of nonperformance risk of the asset is not one of the suggested disclosures.

Statement of Financial Accounting Concepts 8 (SFAC 8), Chapter 8, states that noncontractual asset disclosures could include all of the following except for: - the nature of the asset. - the degree of nonperformance risk. - the quality of the asset. - the location of the asset.

95000 Interim financial reports should be based on the principles, practices and policies used in the prep of the last annual report. Property taxes (60000*3/12) Major repairs (240000*9/12) Total = 95000

On January 16, Tree Co. paid $60,000 in property taxes on its factory for the current calendar year. On April 2, Tree paid $240,000 for unanticipated major repairs to its factory equipment. The repairs will benefit operations for the remainder of the calendar year. What amount of these expenses should Tree include in its third-quarter interim financial statements for the three months ended September 30? $0 $15,000 $75,000 $95,000

2500 The payment is partially an exchange transaction & partially a contribution and the 2 parts should be accounted for separately. Oz would recognize the ticket sales revenue for the 25 tickets, and recognize the balance as contribution revenue.

Oz, a nongovernmental not-for-profit entity, received $50,000 from Ame Company to sponsor a play given by Oz at the local theater. Oz gave Ame 25 tickets, which generally cost $100 each. Ame received no other benefits. What amount of ticket sales revenue should Oz record?

statement of cash flows The key to this question is that this is a NFP entity, not a government. The basic statements for a NFP entity are statement of financial position (like a balance sheet), statement of activities, statement of cash flows, and for voluntary health and welfare entities, a statement of functional expenses.

Pharm, a nongovernmental not-for-profit entity, is preparing its year-end financial statements. Which of the following statements is required? Statement of changes in financial position Statement of cash flows Statement of changes in fund balance Statement of revenue, expenses, and changes in fund balance

Under the cash basis of accounting, revenue is recognized when cash is received and expenses are recognized when cash is disbursed; income and expense items are not accrued. Cash basis accounting results in a measure similar to net income called net operating cash flow, which is the difference between cash receipts and cash disbursements. Savor should report cash-basis pretax income of 84,000 (100,000 accrual income - 10,000 accounts receivable accrual increase - 6000 cash paid for payables) (switch the sign for assets, keep the sign for liabilities) Note that the cash method is not an allowable method under GAAP unless there is no material difference from the accrual method.

Savor Co. had $100,000 in accrual basis pretax income for the year. At year end, accounts receivable had increased by $10,000 and accounts payable had decreased by $6,000 from their prior year-end balances. Under the cash basis of accounting, what amount of pretax income should Savor report for the year?

260,000 total income - cash dividends - property dividends = retained earnings 12/31 exclude: the excess of proceeds over cost of treasury stock sold. This would be credited to APIC under the cost method.

Selected information from the accounts of Row Co. on December 31, 20X1, follows: Total income since incorporation $420,000 Total cash dividends paid 130,000 Total value of property dividends distributed 30,000 Excess of proceeds over cost of treasury stock sold, accounted for using cost method 110,000 In its December 31, 20X1, financial statements, what amount should Row report as retained earnings?

both i and ii the expected loss on the disposal to be reported in smith co.'s income statement for the period ended dec 31 20x1 would include ACTUAL operating losses for 20x1. A gain or loss on disposal shall be disclosed either on the face of the income statement or in the notes to financial statements.

Smith Co. has adopted FASB ASC 205-20 (Presentation of Financial Statements—Discontinued Operations). On November 1, 20X1, in a strategic shift, Smith Co. contracted to dispose of an industry segment on February 28, 20X2. Throughout 20X1 the segment had operating losses. These losses were expected to continue until the segment's disposition. Assuming that the segment qualifies as a component, if a loss is anticipated on final disposition, how much of the operating losses should be included in the loss on discontinued operations reported in Smith's 20X1 income statements? Operating losses for the period January 1 to October 31, 20X1 Operating losses for the period November 1 to December 31, 20X1 Estimated operating losses for the period January 1 to February 28, 20X2

cost constraint, potential adverse consequences, future-oriented information, and relevance FASB 4 constraints/limitations related to financial statement note information: - relevance - cost constraint - potential adverse consequences - future-oriented information

Statement of Financial Accounting Concepts 8 (SFAC 8), Chapter 8, lists four limitations/constraints to consider related to disclosure requirements. They are:

financial capital is applied to both currently reported net income and comprehensive income. SFAC 6 - capital maintenance concept = recovery of cost, separation of return on capital from return of capital - financial capital concept = the effects of price changes on assets held and liabilities owed are recognized as "holding gains and losses" and included in return on capital - physical capital concept = the effect of price changes are recognized as "capital maintenance adjustments" as a separate element of equity & would not be included in return on capital. SFAC continues: the financial capital concept is the traditional view and is generally the capital maintenance concept in present primary financial statements. Comprehensive income as defined in paragraph 70 is a return on financial capital. Thus, the financial capital maintenance approach is applied to both currently reported net income & comprehensive income.

The FASB's conceptual framework explains both financial and physical capital maintenance concepts. Which capital maintenance concept is applied to currently reported net income, and which is applied to comprehensive income? - Physical capital is applied to currently reported net income; financial capital is applied to comprehensive income. - Financial capital is applied to currently reported net income; physical capital is applied to comprehensive income. - Physical capital is applied to both currently reported net income and comprehensive income. - Financial capital is applied to both currently reported net income and comprehensive income

952500 The numerator will be net income + Interest (net of tax) Net income = 600,000 + Interest: Cash (5,000,000 x 0.9) = 450,000 Discount amort = 20,000 = 470,000 - Tax (470,000 x 0.25) = (117500) Numerator = 600,000 + 352,500 = 952,500

The following information is relevant to the computation of Chan Co.'s earnings per share to be disclosed on Chan's income statement for the year ending December 31: Net income for the year is $600,000. $5,000,000 face value 10-year convertible bonds outstanding on January 1. The bonds were issued four years ago at a discount that is being amortized in the amount of $20,000 per year. The stated rate of interest on the bonds is 9%, and the bonds were issued to yield 10%. Each $1,000 bond is convertible into 20 shares of Chan's common stock. Chan's corporate income tax rate is 25%. Chan has no preferred stock outstanding and no other convertible securities. What amount should be used as the numerator in the fraction used to compute Chan's diluted earnings per share assuming that the bonds are dilutive securities?

net revenue = cash sales gross + credit sales gross - returns and allowances - discounts + (40000-30000) = 200,000 we add the difference of 10,000 because that is what the customers paid back Eagle and lowered their liabilitiy.

The following information pertains to Eagle Co.'s 20X1 sales: Cash Sales Gross $ 80,000 Returns and allowances 4,000 Credit Sales Gross 120,000 Discounts 6,000 On January 1, 20X1, customers owed Eagle $40,000. On December 31, 20X1, customers owed Eagle $30,000. Eagle uses the direct write-off method for bad debts. No bad debts were recorded in 20X1. Under the cash basis of accounting, what amount of net revenue should Eagle report for 20X1?

income from continuing operations EPS or earnings per share, must be presented on the face of the income statement for income from continuing operations and net income. EPS for discontinued operations may be disclosed either on the face of the income statement or in the notes. EPS is not required for preferred stock dividends, US Treasury stock, or the compensation effect of fair value on stock options.

The per-share amount must be reported on the face of a public company's income statement for which of the following items? Income from continuing operations Preferred stock dividend U.S. Treasury stock Compensation effect of fair value on stock options

A gain or loss recognized on the disposal shall be disclosed either on the face of the income statement of in the notes to financial statements.

The results of operations of a component classified as held for sale shall be reported in discontinued operations in the periods in which they occur. The results of discontinued operations - applicable income taxes (benefit), shall be reported as a separate component of income. For example, the results of discontinued operations may be reported in the income statement of a business entity as follows: Income from continuing operations before income taxes - income taxes = income from continuing operations Discontinued operations - loss from operations of discontinued component x (including loss on disposal of xx) - income tax benefit - loss on discontinued operations = net income

Sage = 20,000+5,000 = 25,000 outstanding Thyme = 16,000/25000 = 64% (controlling interest) 100-64 = 36% NCI 500,000 + 200,000= 700,000 total value x 36% = 252,000

Thyme, Inc. owns 16,000 of Sage Co.'s 20,000 outstanding common shares. The carrying value of Sage's equity is $500,000. Sage subsequently issues an additional 5,000 previously unissued shares for $200,000 to an outside party that is unrelated to either Thyme or Sage. What is the total noncontrolling interest after the additional shares are issued?

0 Stock dividends are accounted for by reclassifying a portion of retained earnings as contributed capital. They do not reduce assets or increase liabilities. Therefore, total stockholders' equity is not changed.

Universe Co. issued 500,000 shares of common stock in the current year. Universe declared a 30% stock dividend. The market value was $50 per share, the par value was $10, and the average issue price was $30 per share. By what amount will Universe decrease stockholders' equity for the dividend?

Retained earnings: 100,000 increase ; noncontrolling interest: 0 carrying value of palmer's bonds payable 1,075,000 - acquisition cost to seal 975,000 = gain to palmer = 100,000 (consolidated entity). the gain would of course increase consolidated retained earnings. the gain is identified with the issuer of the bonds, which is palmer. therefore, the gain has no effect on noncontrolling interest.

Wagner, a holder of a $1,000,000 Palmer, Inc., bond, collected the interest due on March 31, 20X1, and then sold the bond to Seal, Inc., for $975,000. On that date, Palmer, a 75% owner of Seal, had a $1,075,000 carrying amount for this bond. What was the effect of Seal's purchase of Palmer's bond on the retained earnings and noncontrolling (minority) interest amounts reported in Palmer's March 31, 20X1, consolidated balance sheet?

20x1 = 125000 20x2 = 50,000 When you see "held for sale" the unit must be written down to the fair value, and a loss will be recognized for any intial or subsequent write down to fair value - cost to sell. 20x1 loss = 100,000 write down to fair value = 25,000 & is reported in 20x1. 20x2 oper loss = 50,000, so Wand would report a 50,000 loss from discontinued operations before income taxes in 20x2. "In a period in which a component of an entity either has been disposed of or is classified as held for sale, the income statement of a business entity or statement of activities of a NFP for current and prior periods shall report the results of operations of the component, including any gain or loss recognized in accordance with paragraphs in discontinued operations. The results of operations of a component classified das held for sale shall be reported in discontinued operations in the periods in which they occur. The results of discontinued operations, less applicable income taxes (benefit), shall be reported as a separate component of income. For example, the results of discontinued operations may be reported in the income statement of a business entity as follows: Income from cont ops b4 income taxes income taxes income from cont ops = xxx Discont op: loss from ops of discont component (including loss on disposal of xx) income tax benefit loss on discont ops = net income A gain or loss recognized on the disposal shall be disclosed either on the face of the income statement or in the notes to financial statements.

Wand, Inc., has adopted FASB ASC 205-20 (Presentation of Financial Statements—Discontinued Operations). On October 1, 20X1, in a strategic shift, Wand, Inc., committed itself to a formal plan to sell its Kam division's assets. On that date, Wand estimated that the loss from the disposal of assets in February 20X2 would be $25,000. Wand also estimated that Kam would incur operating losses of $100,000 for the period of October 1, 20X1, through December 31, 20X1, and $50,000 for the period January 1, 20X2, through February 28, 20X2. These estimates were materially correct. Assuming that the Kam division qualifies as a component, disregarding income taxes, what should Wand report as loss from discontinued operations in its comparative 20X1 and 20X2 income statements?

sales revenue the statement of comprehensive income includes all revenues and expenses contained in the income statement/statement of profit and loss. Consequently, it would include sales revenue but would not include investments or distributions by owners or deferred revenue.

Which of the following assets or transactions is an element of comprehensive income? Investments by owners Sales revenue Distributions to owners Deferred revenue

cost for the annual fundraising dinner The FASB defines functional classification as a method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications are program services and supporting activities. Supporting services have several functional subclassifications: - management & general expenses - fundraising expenses (including the cost for the annual fundraising dinner) - membership development Program service expenses are those expenses associated with the mission of the entity: examples include the remaining 3 answers.

Which of the following costs should a nongovernmental not-for-profit organization report as a supporting service expense? - Salary paid to a program director - Cost for the annual fundraising dinner - Printing cost incurred to create educational fliers on the prevention of illness - Cost incurred to advertise the programs of the organization

modified cash basis of accounting where some fixed assets are capitalized while others are expensed For the modified cash basis to be an acceptable form, the modifications must be applied logically and consistently. Capitalizing some fixed assets while expensing others would not represent a consistent or logical application of the framework.

Which of the following is not a special-purpose framework? - Cash receipts and disbursements basis of accounting - Basis of accounting used by an entity to file its income tax return - Basis of accounting used by an entity to comply with the financial reporting requirements of a government regulatory agency - Modified cash basis of accounting where some fixed assets are capitalized while others are expensed

A reconciliation of ending retained earnings to net cash flow from operations A reconciliation of ending retained earnings to net cash flow from operations would serve no useful purpose, and is NOT REQUIRED to be disclosed on the statement of cash flows. Each of the other items mentioned would be disclosed under the direct method.

Which of the following is not disclosed on the statement of cash flows when prepared under the direct method, either on the face of the statement or in a separate schedule?

cash effects of transactions obtaining resources from owners and providing them with a return on their investment Financing activities are associated with a company's liabilities & equity. The list of financing activities in FASB ASC therefore includes cash effects of transactions obtaining resources from owners and providing them with a return on their investment.

Which of the following items is included in the financing activities section of the statement of cash flows? - cash effects of transactions involving making and collecting loans - cash effects of acquiring & disposing of investments and PPE - cash effects of transactions obtaining resources from owners and providing them with a return on their investment - cash effects of transactions that enter into the determination of net income

An update is issued only after a majority vote by the members of the FASB. 1. fasb identifies and issue 2. fasb chairman decides whether to add a project to the agenda, after consultation with FASB members & others as appropriate, subject to oversight by the foundations' board of trustees. the board votes on whether to add a project to the agenda. A simple majority vote is needed. 3. fasb deliberates and has public meetings on the various issues. 4. the board issues the exposure draft. 5. the board holds a public roundtable meeting on the exposure draft, if necessary. 6. the staff analyzes comment letters, public roundtable discussion, and other info, and the board redeliberates. 7. the board issues an accounting standards update by simple majority vote, describing amendments to the accounting standards codification.

Which of the following statements best describes an operating procedure for issuing a new Financial Accounting Standards Board (FASB) Accounting Standards Update? The emerging issues task force must approve a discussion memorandum before it is disseminated to the public. The exposure draft is modified per public opinion before issuing the discussion memorandum. An update is issued only after a majority vote by the members of the FASB. A new FASB update can be rescinded by a majority vote of the AICPA membership.

a strategic shift is the sale of a product line that represents 25% or more of the entity's total revenues. In order for the sale of a portion of an entity to qualify for discontinued operations, it must represent a strategic shift for the entity, meaning that the sale will have a significant effect on the entity's operations and financial results. A strategic shift is the sale of a product line that represents 15% (not 25%) or more of the entity's total revenues. Discontinued operations are reported after income from continuing operations and therefore need to be reported net of tax. The cash flows of the portion of the business to be sold must be clearly distinguishable from the other operations of the portion to be sold.

Which of the following statements regarding reporting for discontinued operations is incorrect? - In order to qualify to be reported as a discontinued operation, the portion of the business being sold must have separate and identifiable cash flows. - In order for a sale to qualify as a discontinued operation, it needs to represent a strategic shift for the entity. - A strategic shift is the sale of a product line that represents 25% or more of the entity's total revenues. - The resulting gain or loss from discontinued operations should be reported net of applicable taxes.

there is no intercompany receivables in a consolidation process. this is a trick question. In the prep of consolidated financial statements, intra-entity balances and transactions shall be eliminated.

Wright Corp. has several subsidiaries that are included in its consolidated financial statements. In its December 31, 20X1, trial balance, Wright had the following intercompany balances before eliminations: Debit Credit Current receivable due from Main Co. 32,000Noncurrent receivable from Main Co. 114,000Cash advance to Corn Corp. 6,000Cash advance from King Co. 15,000Intercompany payable to King 101,000 In its December 31, 20X1, consolidated balance sheet, what amount should Wright report as intercompany receivables?

net income - pref stock div / weighted average number of shares outstanding beg shares x x/12 + treasury shares x time ADD THE TREASURY STOCK SALES BACK TO GET THE TOTAL # COMMON SHARES OUTSTANDING

basic eps. what to do with treasury shares