ACCT 284 Exam 3 EQN

Straight line depreciation (depreciation same each year)

(BV-salvage (residual) value)/ # of years useful

Double Declining Method

1/2 estimated * 2 = rate Then...rate * prior year BV

Write-offs (same for a/r + ADA tables)

BB + BE - x =EB

Cash Allowances (a/r table)

BB + credit sales - Write offs - x = ending balance

Estimating Bad Debt: Credit Sales Method

BDE = total credit sales * % of bad debts

Units of production method

BV - salvage value = amount depreciated Then... BV/# units expected to produce = rate Then... amount depreciated * rate

Bad Debt Expense (ada)

Given BDE in current year

Amortization of discount

Int expense - cash interest

Interest Expense

Market rate * CV

Estimating Bad Debt: Aging Method

Multiply a/r * estimated % uncollectible Across table, add all together + ADA

Balance of Discount

Year 0 = FV - CV Next years? Prior year balance of discounts- amortization of discounts

Ending Balance for Accounts Receivable

current year a/c + current year net allowances

Ending balance for ADA

current year net allowances

Credit Sales (a/r table)

given net credit sales of current year

Net a/r

gross a/c - ADA

Fixed Asset turnover ratio

net sales revenue / average net fixed assets

Beginning Balance for Accounts Receivable

prior year a/c + prior year net allowances

Beginning Balance for doubtful accounts

prior year net allowances

Cash Interest

stated rate * FV

Debt to asset ratio

total liabilities / total assets