Assuming office supplies are charged to the Office Supplies inventory account when purchased:

Size: px
Start display at page:

Download "Assuming office supplies are charged to the Office Supplies inventory account when purchased:"

Transcription

1 Adjusting Entries Prepaid Expenses Second Bullet Example - Assuming office supplies are charged to the Office Supplies inventory account when purchased: Office supplies expense 7,800 Office supplies 7,800 Office supplies used = $3, ,000 2,700 = $7,800 Assuming office supplies are charged to the office supplies expense account when purchased (i.e. there is a balance of $3,500 in the Office Supplies inventory account and $7,000 in the office supplies expense account): Office supplies expense 800 Office supplies ($3,500 2,700) 800 Third Bullet Example - Assuming the $6,600 was debited to Prepaid Insurance: Insurance expense 1,925 Prepaid Insurance 1,925 $6,600 x 7/24 Assuming the $6,600 was debited to Insurance Expense: Prepaid Insurance 4,675 Insurance expense 4,675 $6,600 x 17/24

2 Adjusting Entries Unearned Revenues Third Bullet Example - Assuming the $96,000 was credited to Unearned Revenues: Unearned revenues 72,000 Revenues 72,000 $96,000 x 9/12 Assuming the $96,000 was credited to Revenues: Revenues 24,000 Unearned revenues 24,000 $96,000 x 3/12

3 Adjusting Entries Accrued Liabilities Third Bullet Example - Interest expense 12,500 Interest payable 12,500 $250,000 x 7.5% x 8/12 Fourth Bullet Example - Wages expense 9,000 Wages payable 9,000 $3,000 x 3 days

4 Adjusting Entries Accrued Assets Third Bullet Example - Interest receivable 1,333 Interest revenue 1,333 $100,000 x 8% x 2/12

5 Periodic System Calculating COGS Example Cost of goods sold 1,601,600 Inventory ($285, ,000) 35,000 Purchase returns and allowance 25,600 Purchase discounts 5,800 Purchases 1,650,000 Transportation-in 18,000 Check: Opening inventory $250,000 Purchases net ($1,650, ,000 25,600 5,800) 1,636,600 Less ending inventory (285,000) 1,601,600

6 Statement of Cash Flow Example 1 Given the following information, solve for cash collections from customers: Beginning accounts receivable $50,000 Ending accounts receivable 60,000 Sales 2,000,000 Unearned revenues - beginning 30,000 Unearned revenues - ending 35,000 $2,000, ,000 increase in unearned revenues 10,000 Increase in AR = $1,995,000 Statement of Cash Flow Example 2 Given the following information, solve for cash payments to suppliers: Beginning inventory $270,000 Ending inventory 245,000 Cost of goods sold 970,000 Beginning accounts payable 165,000 Ending accounts payable 185,000 Purchases = $970,000 25,000 Decrease in Inventory = $945,000 Cash disbursements on purchases = $945,000 20,000 Increase in AP = $925,000 Statement of Cash Flow Example 3 Given the following information, solve for proceeds from the sale of property, plant and equipment (there were no additions during the year) Cost of property, plant and equipment - Beginning $1,200,000 Ending 1,030,000 Accumulated depreciation - Beginning 660,000 Ending 740,000 Loss on sale of equipment 25,000 Depreciation expense 150,000 Cost of equipment sold = $1,200,000 1,030,000 = $170,000 Accumulated amortization of equipment sold = $150,000 80,000 Increase in depreciation expense = $70,000 NBV of asset sold = $170,000 70,000 = 100,000 Proceeds = $100,000 25,000 = $75,000

7 Statement of Cash Flow Example 4 Given the following information, solve for interest paid: Interest paid $170,000 Interest payable, beginning 6,700 Interest payable, ending 7,700 $170,000 1,000 Increase in interest payable = $169,000

8 Percentage of Completion Example The Jerome Company is ending the first year of a three year project whose contracted price is $2,500,000. A total of $600,000 has been spent on this project to date and they expect to incur an additional $1,400,000. A total of $500,000 was billed in the first year. How much profit can be reported on this contract in the first year. Prepare all journal entries relative to this contract. % of completion = 600 / ( ,400) = 600/2,000 = 30% Expected total profit on contract = $2,500 2,000 = $500 Profit that can be recognized this year = $500 x 30% = $150 Journal entries: Construction in Progress $600,000 Cash, Accounts Payable $600,000 Accounts Receivable 500,000 Billings 500,000 Cost of goods sold 600,000 Construction in Progress 150,000 Revenues ($2,500,000 x 30%) 750,000

9 Accounts Receivable Example 1 Allowance, beginning $27,000 Less write offs (37,000) Plus recoveries 4,500 Balance before adjustment 5,500 dr. Allowance required at end 35,000 Bad debt expense $40,500 Accounts Receivable Example 2 $2,250,000 Sales 25,000 Increase in A/R - 5,000 Accounts Written off = $2,220,000

10 Review of PV Concepts 1. What is the present value of $10,000 to be received in 10 years; i=8% 2. What is the present value of $10,000 to be received in 5 years and $20,000 to be received in 10 years; i= 5% 3. What is the present value of an 20 year annuity of $1,000 per year; i=7% 4. What is the present value of a 10 year annuity of $5,000 with the first payment to be received 5 years from now; i=9% 5. You take out a loan in the amount of $100,000 with annual equal repayments of principal and interest over the next 20 years. What is your annual payment? What is the balance of the loan after the 8th payment? i=6% 1. N = 10, I = 8, FV = 10,000, PV = $4, N = 5, I = 5, FV = 10,000, PV = $7, N = 10, I = 5, FV = 20,000, PV = $12, Total = $20, N = 20, I = 7, PMT = 1000, PV = $10, N = 10, I = 9, PMT = 5000, PV = 32, (PV in 4 years from now) N = 4, I = 9, FV = 32,088.29, PV = $22, Annual payment: N = 20, I = 6, PV = , PMT = $8, Balance after 8 th payments = N = 12, I = 6, PMT = , PV = $73,094.21

11 Promissory Notes Example You sell equipment with a list price of $100,000 on January 1, 20x1. The imputed rate = 8%. How would you account for this transaction under the following independent terms: i. 0% interest, pay $100,000 in 2 years ii. 2% payable annually, $100,000 payable in 4 years iii. iv. 0% interest in years 1-2, 5% interest in years 3-5, pay $100,000 in 5 years equal annual payments of principal and interest over 4 years at an interest rate of 3%. v. 0% interest, pay $100,000 in three years. You do not know the discount rate, but the current cash price of the equipment is $80,000 i. PV of note: N = 2, i=8, FV = , PV = $85,734 Jan 1, 20x1 Note receivable $85,734 Sale $85,734 Dec 31, 20x1 Note receivable ($85,734 x 8%) 6,859 Interest revenue 6,859 Dec 31, 20x2 Note receivable ($92,593 x 8%) 7,407 Interest revenue 7,407 Cash 100,000 Note receivable 100,000 Assume now that the entity is subject to ASPE and has opted to amortize the discount on the note using the straight line method: Dec 31, 20x1 Note receivable 7,133 Interest revenue 7,133 ($100,000-85,734) / 2 Dec 31, 20x2 Note receivable 7,133 Interest revenue 7,133

12 ii. PV of note: N = 4, I = 8, PMT = 2000, FV = , PV = $80,127 Jan 1, 20x1 Note receivable $80,127 Sale $80,127 Dec 31, 20x1 Cash 2,000 Note receivable 4,410 Interest revenue ($80,127 x 8%) 6,410 Dec 31, 20x2 Cash 2,000 Note receivable 4,763 Interest revenue ($84,537 x 8%) 6,763 iii. PV of interest for years 3-5 at t = 2: N = 3, I = 8, PMT = 5000, PV = 12, PV of interest for years 3-5 at t = 0: N = 2, I = 8, FV = , PV = 11, PV of principal amount: N = 5, I = 8, FV = , PV = 68, = 11, , = $79,106 Jan 1, 20x1 Note receivable 79,106 Sale 79,106 Dec 31, 20x1 Note receivable ($79,106 x 8%) 6,328 Interest revenue 6,328 Dec 31, 20x2 Note receivable ($85,434 x 8%) 6,835 Interest revenue 6,835 Dec 31, 20x3 Cash 5,000 Note receivable 2,382 Interest revenue 7,382

13 iv. Annual payment: N = 4, I = 3, PV = , PMT = $26,903 PV of note: N = 4, I = 8, PMT = 26903, PV = $89,106 Jan 1, 20x1 Note receivable $89,106 Sale $89,106 Dec 31, 20x1 Cash 26,903 Interest revenue ($89,106 x 8%) 7,128 Note receivable 19,775 Dec 31, 20x2 Cash 26,903 Interest revenue ($69,331 x 8%) 5,546 Note receivable 21,357 v. The imputed interest rate: N = 3, PV = -80,000, FV = 100,000, Compute I/Y = 7.72% Jan 1, 20x1 Note receivable $80,000 Sale $80,00 Dec 31, 20x1 Note receivable ($80,000 x 7.72%) 6,176 Interest revenue 6,176 Dec 31, 20x1 Note receivable ($86,176 x 7.72%) 6,653 Interest revenue 6,653 Dec 31, 20x2 Note receivable ($92,829 x 7.72%)* 7,171 Interest revenue 7,171 *rounded to balance Cash 100,000 Note receivable 100,000

14 Application of Lower of Cost or Market Example Items B, C and E will have to be written down: B: $16,400 14,200 = $2,200 C: $4,600 4,400 = $200 E: $9,400 8,800 = $600 Total writedown = $3,000 Inventory will be reported at: $40,600 3,200 = $37,600

15 Inventory Example Periodic System - FIFO Ending Inventory (1,000 x $4.25) + (500 x $4.20) $6,350 Weighted Average Ending Inventory Cost of goods available for sale = (1,000 x $4.00) + (800 x $4.20) + (1,000 x $4.25) = $11,610 Average cost = $11,610 / (1, ,000) = $ Ending inventory = 1,500 units x $ $6,220 Perpetual System FIFO Date Number of Units Total Purchase cost Unit Cost Balance ($) Opening Balance 1,000 $4,000 $4.00 $4,000 Sale # 1 (600) ,600 Purchase # , ,960 Sale # 2 (400) ,360 (300) ,100 Purchase # 2 1,000 $4, ,350 Note that the FIFO perpetual result will always be equal to the FIFO periodic result. Moving Weighted Average Date Number of Units Balance in Units Total Purchase cost Average Cost Balance ($) Opening Balance 1,000 1,000 $4,000 $ $4,000 Sale # 1 (600) ,600 Purchase # ,200 3, ,960 Sale # 2 (700) ,067 Purchase # 2 1,000 1,500 4, ,317

16 Gross Profit Method Example On June 15, a company s warehouse was destroyed by a fire. Use the following information to estimate the value of the ending inventory: Sales to June 15 $4,500,000 Opening inventory 450,000 Purchases to June 15 3,250,000 Gross Profit % 28% Cost of goods sold as a % of sales = = 72% Opening inventory $ 450,000 Purchases 3,250,000 Cost of goods available for sale 3,700,000 Less estimate of cost of goods sold: $4,500,000 x 72% 3,240,000 Ending inventory estimate $ 460,000

17 Asset Retirement Obligation You invest $100,000,000 in a project on Jan 1, 20x1 and estimate the asset retirement obligation to be $50,000,000 in 25 years (the end of the useful life of the project). If the relevant discount rate is 6%, prepare the journal entries relative to this project for the first two years. On January 15, 20x26 the actual asset retirement costs amount to $54,000,000. Prepare the journal entry to record the realization of the ARO. PV of ARO: N I/Y PV PMT FV Enter ,000,000 Compute 11,649,932 Jan 1, 20x1 Asset $111,649,932 Cash $100,000,000 Asset Retirement Obligation 11,649,932 Dec 31, 20x1 Depreciation expense 4,465,997 Accumulated depreciation 4,465,997 $111,649,932 / 25 Interest expense 698,996 Asset retirement obligation 698,996 $11,649,932 x 6% Dec 31, 20x2 Depreciation expense 4,465,997 Accumulated depreciation 4,465,997 $111,649,932 / 25 Interest expense 740,936 Asset retirement obligation 740,936 ($11,649, ,996) x 6% Jan 15, 20x26 Asset retirement obligation 50,000,000 Loss on disposal 4,000,000 Cash 54,000,000

18 Subsequent Expenditures Example A building was purchased at a cost of $5,000,000 on January 2, 20x1. Part of the cost ($200,000) was allocated to the furnace which had an estimated useful life of 20 years with no residual value. On December 31, 20x14, the furnace was replaced at a cost of $260,000. The estimated useful life of the new furnace is 15 years. Assume the straight-line depreciation method is used. Furnace - new $260,000 Cash $260,000 Accumulated depreciation old furnace 140,000 Loss on disposal 60,000 Furnace old 200,000

19 Exchanges of Assets Example Adams Co. exchanged an asset with Bach Ltd. Details of the asset exchange are as follows: Adams Bach Original cost of asset $250,000 $400,000 Accumulated depreciation 150, ,000 Fair value of equipment 90,000 75,000 Cash paid 15,000 Prepare the journal entries on the books of both companies to record the exchange assuming (1) commercial substance and (2) no commercial substance. (1) Commercial Substance Adams Co - Cash $15,000 Asset new 75,000 Accumulated depreciation old asset 150,000 Loss on disposal of asset 10,000 Asset old 250,000 Bach Co - Asset new 90,000 Accumulated depreciation old asset 300,000 Loss on disposal of asset 25,000 Cash 15,000 Asset old 400,000

20 (2) No commercial Substance Adams Co. Cash 15,000 Asset new* 85,000 Accumulated depreciation old asset 150,000 Asset old 250,000 * Carrying value of asset given up $100,000 Less cash received 15,000 $ 85,000 Bach Co - Asset new* 115,000 Accumulated depreciation old asset 300,000 Cash 15,000 Asset old 400,000 * Carrying value of asset given up $100,000 Plus cash paid 15,000 $115,000 Note that this asset would then be subject to an impairment test and could well be written down to its fair market value.

21 Depreciation Methods Asset costing $100,000 purchased on January 2, 20x2 Useful life = 10 years Residual value = $20,000 Asset is sold on January 2, 20x7 for $30, Calculate (i) depreciation expense for the first two years under SL and Diminishing Balance method (20%) and (ii) calculate the gain or loss on disposal in 20x7 2. Assume that the useful life is 100,000 hours and that 12,622 hours are used up in 20x2. Calculate depreciation expense using the units of production method. 1. i. Straight line = ($100,000 20,000) / 10 = $8,000 for each of the 10 years Diminishing Balance - Depreciation expense Year 1 = $100,000 x 20% = $20,000 Year 2 = ($100,000 20,000) x 20% = $16,000 OR: $100,000 x 80% x 20% = $16,000 ii. Straight line - NBV = $100,000 (8,000 x 5) = $60,000 Loss on disposal = $30,000 60,000 = $30,000 Diminishing Balance - NBV = $100,000 x = $32,768 Loss on disposal = $30,000 32,768 = $2, ($100,000 20,000) / 100,000 x 12,622 = $10,098

22 Partial Year Depreciation Example An asset costing $200,000 is purchased on April 30, 20x5. The asset s useful life is 10 years and its estimated residual value is $20,000. The company s year-end is December 31. Calculate the depreciation expense for 20x5 and 20x6 assuming that: (a) the straight line method is used, and (b) the double declining balance method is used (a) 20x5: ($200,000 20,000) / 10 = $18,000 x 8/12 = $12,000 20x6: $18,000 (b) 20x5: $200,000 x 20% x 8/12 = $26,667 20x6: $200,000 x 20% x 4/12 = 13,333 PLUS: ($200,000 40,000) x 20% x 8/12 = $21,333 Total = $13, ,333 = $34,666 Alternatively 20x5 as above 20x6 ($200,000 26,667) x 20% = $34,666

23 Revision of Depreciation Estimates Example An asset costing $2,000,000 was purchased on December 31, 20x1. The estimate of useful life and residual value at the time was $200,000 and 20 years respectively. The straight line method is used. In 20x9, the total useful life of the asset was revised down to 15 years and the salvage value was re-estimated to be $350,000. What is the depreciation expense in 20x9? Assume a December 31 year-end. Net book value of the asset on January 1, 20x9: $2,000,000 [(2,000, ,000) / 20) x 7 years] = $1,370,000 Depreciation expense in 20x9 = ($1,370, ,000) / 8 years remaining = $127,500

24 Revaluation Example 1 A company acquires land in June of 20x4 at a cost of $400,000 and follows a revaluation policy for land. Land is appraised annually and the following are the appraised amounts: December 31, 20x4 $500,000 December 31, 20x5 420,000 December 31, 20x6 350,000 December 31, 20x7 480,000 Dec 31, 20x4 Land $100,000 Revaluation Surplus (OCI) $100,000 Dec 31, 20x5 Revaluation Surplus (OCI) 80,000 Land 80,000 Dec 31, 20x6 Revaluation Surplus (OCI) 20,000 Revaluation Loss (I/S) 50,000 Land 70,000 Dec 31, 20x7 Land 130,000 Revaluation Gain 50,000 Revaluation Surplus (OCI) 80,000

25 Revaluation Example 2 A depreciable asset costing $600,000 is purchased on January 2, 20x4. The residual value of the asset is $100,000 and the asset s useful life is 10 years. The straight-line method is used. The asset is revalued every two years as follows: December 31, 20x5 $530,000 December 31, 20x7 400,000 Dec 31, 20x4 Depreciation expense $50,000 Accumulated Depreciation $50,000 Dec 31, 20x5 Depreciation expense 50,000 Accumulated Depreciation 50,000 December 31, 20x5 Revaluation Proportionate Approach - Carrying Amount before Revaluation Carrying amount after revaluation Asset account $600, / 500 $636,000 Accumulated depreciation (100,000) 530 / 500 (106,000) $500,000 $530,000 Dec 31, 20x5 Asset 36,000 Accumulated depreciation 6,000 Revaluation surplus (OCI) 30,000 Gross Carrying Amount Approach Dec 31, 20x5 Accumulated Depreciation 100,000 Asset 100,000 Asset 30,000 Revaluation surplus (OCI) 30,000 Dec 31, 20x6 Depreciation Expense 53,750 Accumulated Depreciation 53,750 ($530, ,000) / 8 Dec 31, 20x7 Depreciation Expense 53,750 Accumulated Depreciation 53,750

26 December 31, 20x7 Revaluation Proportionate Approach - Carrying Amount before Revaluation Carrying amount after revaluation Asset account $636, / $602,130 Accumulated depreciation (213,500) 400 / (202,130) $422,500 $400,000 Dec 31, 20x7 Accumulated Depreciation 11,370 Revaluation surplus (OCI) 22,500 Asset 33,870 Gross Carrying Amount Approach Dec 31, 20x7 Accumulated Depreciation 107,500 Asset 107,500 Revaluation surplus (OCI) 22,500 Asset 22,500 Dec 31, 20x8 Depreciation Expense 50,000 Accumulated Depreciation 50,000 ($400, ,000) / 6 Dec 31, 20x9 Depreciation Expense 50,000 Accumulated Depreciation 50,000

27 Bond Example 1 On Jan 1, 20x1, you issue $1,000,000 of bonds. Interest payment dates = June 30, Dec 31. Maturity = 20 years, coupon = 8%, YTM = 10%. 1. Write all journal entries for 20x1 assuming the company uses the effective interest rate method. 2. Assume that on July 1, 20x7, we retire 40% of the bonds on the open 95. Write the journal entry to record the retirement of the bonds. 3. Repeat the above assuming the company is subject to ASPE and opts to use the straight line method for discount/premium amortization. 1. PV of Bond Issue: N I/Y PV PMT FV Enter Compute 828,409 Jan 1, 20x1 Cash $828,409 Bonds payable $828,409 Jun 30, 20x1 Interest expense ($828,409 x 5%) 41,420 Bonds payable 1,420 Cash 40,000 Dec 31, 20x1 Interest expense ($828, ,420) x 5% 41,491 Bonds payable 1,491 Cash 40, BV of Bond Issue at July 1, 20x7 - N I/Y PV PMT FV Enter Compute 853,570 Jul 1, 20x7 Bonds payable ($853,570 x 40%) $341,428 Loss on retirement of bonds payable 38,572 Cash ($1,000,000 x 40% x.95) 380,000

28 3. Jan 1, 20x1 Cash $828,409 Bonds payable $828,409 Jun 30, 20x1 Interest expense 44,290 Bonds payable* 4,290 Cash 40,000 * (1,000, ,409) / 40 Dec 31, 20x1 Interest expense 44,290 Bonds payable 4,290 Cash 40,000 The book value of the bonds payable at July 1, 20x7 would be: $828,409 + ($4,290 x 13) = $884,179 Jul 1, 20x7 Bonds payable ($884,179 x 40%) 353,672 Loss on retirement of bonds payable 26,328 Cash ($1,000,000 x 40% x.95) 380,000

29 Bond Example 2 On Jan 2, 20x3, you issue $60,000,000 of bonds. Interest payment dates = June 30, Dec 31. Maturity = 40 years, coupon = 6.3%, YTM = 5.9%. 1. Write all journal entries for 20x3 assuming the effective interest rate method is used. 2. Assume that on July 1, 20x16, we retire 100% of the bonds on the open 101. Write the journal entry to record the retirement of the bonds. PV of Bond Issue: N I/Y PV PMT FV Enter Compute 63,670,375 Jan 2, 20x3 Cash $63,670,375 Bonds payable $63,670,375 Jun 30, 20x3 Interest expense ($63,670,375 x 2.95%) 1,878,276 Bonds payable 11,724 Cash 1,890,000 Dec 31, 20x3 Interest expense ($63,670,375 11,724) x 2.95% 1,877,930 Bonds payable 12,070 Cash 1,890,000 BV of Bond Issue at July 1, 20x16 - N I/Y PV PMT FV Enter Compute 63,196,507 Jul 1, 20x16 Bonds payable $63,196,507 Gain on retirement of bonds payable 2,596,507 Cash ($60,000,000 x 1.01) $60,600,000

30 Bond Example 3 On March 1, 20x1, you issue $1,000,000 of bonds. Interest payment dates = June 30, Dec 31. Maturity = 15 years, coupon = 10%, YTM = 8%. Write journal entries for 20x1. Use both SL and effective interest method. Assume the effective interest rate method is used. PV of Bond Issue = N I/Y PV PMT FV Enter Compute 1,172,920 Interest collected from bondholders = $50,000 x 2/6 = $16,667 Mar 1, 20x1 Cash ($1,172, ,667) $1,189,587 Interest expense 16,667 Bonds payable $1,172,920 Jun 30, 20x1 Interest expense ($1,172,920 x 4%) 46,917 Bonds payable 3,083 Cash 50,000 Dec 31, 20x1 Interest expense ($1,172,920 3,083) x 4% 46,793 Bonds payable 3,207 Cash 50,000

31 Expense Warranty Example A firm offers 2 year warranty on its products. They expect the warranty costs to be 1% of the selling price in the 1st year and 3% in the second year. Sales in year 1 = $6,000,000 and warranty costs incurred = $45,000. Sales in year 2 are $8,500,000 and warranty costs incurred are $315,000. Management now estimates that warranty costs to be 0.8% of the selling price in the 1st year and 2.6% in the second year. Write the journal entries for years 1 and 2. Year 1 Warranty expense ($6,000,000 x 4%) $240,000 Warranty liability $240,000 Warranty liability 45,000 Cash, Accounts payable 45,000 Year 2 Warranty expense ($8,500,000 x 3.4%) 289,000 Warranty liability 289,000 Warranty liability 315,000 Cash, Accounts payable 315,000

32 Sales Warranty Example A product comes with a 1 year warranty, the company sells an additional 3 years extended warranty for $180. Assume a sale takes place on Jan 1, 20x1. The company estimates that warranty costs in the first year will amount to $15 per unit. In 20x1, the product is repaired at a cost of $20. In 20x2, the product is repaired at a cost of $30 and expected repair costs in 20x3 and 20x4 are $40. In 20x3, the product is repaired at a cost of $10 and expected repair costs in 20x4 are $20. Actual repair costs in 20x4 are $0. Write the journal entries for 20x1-20x4? 20x1 Cash 180 Unearned sales warranty revenue 180 Warranty expense 15 Warranty Liability 15 Warranty liability* 20 Cash, A/P, Inventory x2 Sales warranty expense 30 Cash 30 Unearned sales warranty revenue 77 Sales warranty revenue 77 % of completion = 30 / ( ) = 42.86% Revenues realized = $180 x 42.86% = $77 20x3 Sales warranty expense 10 Cash 10 Unearned sales warranty revenue 43 Sales warranty revenue 43 % of completion = ( ) / ( ) = 66.67% Cumulative revenues realized = $180 x 66.67% = $120 Realized in 20x3 = $ = $43

33 20x4 Unearned sales warranty revenue 60 Sales warranty revenue 60 $ = $60 * some students will be tempted to adjust the warranty liability for the extra $5 paid. This would not necessarily happen as the $15 is an average repair cost some units will be repaired at a lower cost, a higher cost or no cost. Students should be reminded that this example is somewhat simplified as it deals with one sale. In reality, this exercise would be done in the aggregate.

34 Premium Example You sell cereal - each box has a coupon. Customers redeem 20 coupons and receive a prize. Cost of prize to the company is $6, the fair value of each prize is $10. Average redemption rate = 20%. In year 1, you sell 300,000 boxes and redeem 1,100 prizes. In year 2, you sell 400,000 boxes and redeem 4,500 prizes. Write the journal entries for the two first years. 20x1 Revenues $30,000 Deferred revenues $30, ,000/20 x 20% x $10 Deferred revenues (1,100 x $10) 11,000 Revenues 11,000 Incentive expense (1,100 x $6) 6,600 Cash or inventory of prizes 6,600 20x2 Revenue 40,000 Deferred revenues 40, ,000/20 x 20% x $10 Deferred revenues (4,500 x $10) 45,000 Revenues 45,000 Incentive expense (4,500 x $6) 27,000 Cash or inventory of prizes 27,000

35 Contingent Liabilities Example Assume that you are a company selling spinach and that one of your employees spiked the spinach one day and as a result 10 people die. At year end, you find out that you are being sued for $100M. What do you do? 4 possibilities: 1. legal council says the lawsuit is frivolous and that it will never get to court 2. legal council believes you will have to pay $50M (no more, no less) 3. legal council believes that you will have to pay but cannot estimate how much 4. legal council believes that you will have to pay between 40-80M, with equal probability 1. this is neither a provision nor a contingent liability - does not get recorded under both IFRS and ASPE 2. this is a provision and should be accrued and possibly discounted (IFRS). Undiscounted cash flows of $50M accrued under ASPE. 3. this meets the definition of a contingent liability - disclose under both ASPE and IFRS 4. IFRS: accrue the mid point of $60M. ASPE: accrue $40M as a provision and disclose remaining as a contingent liability.

36 Reacquisition of Common Shares An entity starts the year with 500,000 common shares outstanding with a book value of $2,000,000 On May 1, they issue 100,000 $6 On June 16, they issue 250,000 $7.50 On Aug 7, they repurchase and cancel 50,000 shares $4.60 On Sep 20, they issue 300,000 $8.00 On Nov 16, they repurchase and cancel 100,000 shares $7.00 May 1 Cash (100,000 x $6) $600,000 Common shares $600,000 Jun 15 Cash (250,000 x $7.50) 1,875,000 Common shares 1,875,000 Aug 7 Common shares (50,000 x $5.265) 263,250 Contributed Surplus 33,250 Cash (50,000 x $4.60) 230,000 Sep 20 Cash (300,000 x $8.00) 2,400,000 Common shares 2,400,000 Sep 16 Common shares (100,000 x $6.011) 601,100 Contributed surplus 33,250 Retained earnings 65,650 Cash (100,000 x $7.00) 700,000 Date Common Stock Account # Shares Book Value/ Share Jan 1 $2,000, ,000 $4.000 May 1 600, ,000 Jun 15 1,875, ,000 4,475, ,000 $5.265 Aug 7 263,250 (50,000) Sep 20 2,400, ,000 6,611,750 1,100,000 $6.011 Nov ,100 (100,000) $6,010,650 1,000,000

37 Stock Compensation Plan Example On Jan 2, 20x1 a company issues 100,000 options to executives to purchase $12 (equal to the market value of the shares at that date). An option valuation model puts the value of these options at $600,000. Vesting period = 3 years. Executives can exercise their options in 20x4. The company estimates that 80% of the executives will vest their stock options. At the end of 20x2, the company now estimates that 85% of the executives will vest their stock options. During 20x3, 10,000 options are forfeited due to employment related reasons. On Jan 2, 20x4, 40,000 options are exercised when the market price of the shares is $42. By December 31, 20x4 the remaining options expired. Write all journal entries related to this plan. Jan 2, 20x1 No entry. Dec 31, 20x1 Compensation expense $160,000 Contributed Surplus Stock Options $160,000 $600,000 / 3 years x 80% Dec 31, 20x2 Compensation expense 180,000 Contributed Surplus Stock Options 180,000 Cumulative Compensation expense based on new estimate: $600,000 / 3 x 2 x 85% $340,000 Less 20x1 Compensation expense 160,000 $180,000 Dec 31, 20x3 Compensation expense 200,000 Contributed Surplus Stock Options 200,000 Cumulative Compensation expense based on actual results: $600,000 x 90,000 / 100,000 $540,000 Less cumulative compensation expense recorded to the end of 20x2: (340,000) 20x3 Compensation expense $200,000

38 Jan 2, 20x4 Dec 31, 20x4 Contributed Surplus Stock Options $540,000 x 40,000 / 90, ,000 Cash (40,000 x $12) 480,000 Common stock 720,000 Contributed Surplus Stock Options $540,000 x 50,000 / 90, ,000 Contributed Surplus 300,000

39 Share Appreciation Rights Example An entity grants 100 cash share appreciation rights (SARs) to each of its 500 employees, on condition that the employees remain in its employ for the next five years (20x1 20x5) During 20x1, 35 employees leave and the entity estimates that another 60 will leave before the end of the vesting period. During 20x2, 40 employees leave and the entity estimates that a further 25 will leave before the end of the vesting period. During 20x3, 22 employees leave. At the end of 20x3, 150 employees exercise their SARs, another 140 exercise their SARs at the end of 20x4 and the remaining 113 employees exercise their SARs at the end of 20x5. The fair value of each SAR at year end are as follows: 20x1 - $ x2 - $ x3 - $ x The intrinsic value of each SAR at year-end are as follows: 20x3 - $ x4 - $ x5 - $25.00 SAR Liability 20x1 Compensation Expense = = 405 $194, x 100 x $14.40 x 1/3 218,933 20x2 Compensation Expense 20x2 Account Balance = = , x 100 x $15.50 x 2/3 20x3 Payout: 150 x 100 x $15 225, ,127 20x3 Compensation Expense 20x3 Account Balance = = , x 100 x $ x4 Payout: 140 x 100 x $20 280,000 61,360 20x4 Compensation Expense 20x4 Account Balance = = , x 100 x $ x4 Payout: 113 x 100 x $25 282,500 40,680 20x4 Compensation Expense -0-

40 Calculating Current Service Cost Example Assume an employee has just worked his first year for a given employer. It is expected he will retire in 35 years and then live in retirement for another 22 years. The pension benefit formula is: # of years of service x 2% x average five best years of salary. His average five best years of salary are projected at $100,000. What is the current service cost for this employee for the 1st year. What is the defined benefit obligation for this employee after the 3rd year? Assume a discount rate of 6%. Current Service Cost in year 1 (assumed to occur at end of year 1): The employee earned retirement benefits of 1 year x 2% x $100,000 = $2,000. The PV of these retirement benefits as at the last day of work (in 35 years) is: N I/Y PV PMT FV Enter Compute 24,083 The PV at the end of year of year 1 of this sum is: N I/Y PV PMT FV Enter ,083 Compute 3,321 The current service cost is $3,321. The Accrued Benefit Obligation as at the end of year 3: The employee earned retirement benefits of 3 years x 2% x $100,000 = $6,000. The PV of these retirement benefits as at the last day of work (in 35 years) is: N I/Y PV PMT FV Enter Compute 72,249 The PV at the end of year of year 1 of this sum is: N I/Y PV PMT FV Enter ,249 Compute 11,196 The accrued benefit obligation for this one employee at the end of year 3 is $11,196.

(13) Accounting for Leases

(13) Accounting for Leases (13) Accounting for Leases 258 Accounting for a Lease that Transfers Ownership finance lease: a lease that transfers the rights, rewards, and risks of ownership is considered an acquisition lessee has

More information

Chapter 8 Accounting for Receivables

Chapter 8 Accounting for Receivables Chapter 8 Accounting for Receivables Accounts Receivable Accounts Receivables are current assets. They are usually expected to be collected within 30 days. Allowance Method and Bad Debt Expense 2 methods:

More information

Accounting Cheat Sheet

Accounting Cheat Sheet DIAGRAM OF TACCOUNTS Assets = Balance Sheet as of 12/31/20 Liabilit ies + = + Equity METHODS & ORGS Accrual basis Follows the matching principle and recognizes transactions as they occur (GAAP Method)

More information

HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013

HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 HARMONIC DRIVE SYSTEMS INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS

More information

Long-Term Debt. Objectives: simple present value calculations. Understand the terminology of long-term debt Par value Discount vs.

Long-Term Debt. Objectives: simple present value calculations. Understand the terminology of long-term debt Par value Discount vs. Objectives: Long-Term Debt! Extend our understanding of valuation methods beyond simple present value calculations. Understand the terminology of long-term debt Par value Discount vs. Premium Mortgages!

More information

TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations:

TRANSACTIONS ANALYSIS EXAMPLE. Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: TRANSACTIONS ANALYSIS EXAMPLE Maxwell Partners Medical Diagnostic Services report the following information for 2011, their first year of operations: 1. Billings to clients for services provided: $350,000

More information

CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS

CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS C H 2 3, P a g e 1 CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS (note from Dr. N: I have deleted questions for you to omit, but did not renumber the remaining questions) 1. The primary purpose of

More information

Solution. Term: Fall Year: Time Period Start time: 9:00 am End time: 11:30 am

Solution. Term: Fall Year: Time Period Start time: 9:00 am End time: 11:30 am Solution Term: Fall Year: 2011 Student Name Student ID Number Date of Exam Thursday, December 15, 2011 Time Period Start time: 9:00 am End time: 11:30 am Duration of Exam 2.5 hours Number of Exam Pages

More information

6. Depreciation is a process of a. asset devaluation. b. cost accumulation. c. cost allocation. d. asset valuation.

6. Depreciation is a process of a. asset devaluation. b. cost accumulation. c. cost allocation. d. asset valuation. 1. A company purchased land for $72,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start.

More information

G8 Education Limited ABN: 95 123 828 553. Accounting Policies

G8 Education Limited ABN: 95 123 828 553. Accounting Policies G8 Education Limited ABN: 95 123 828 553 Accounting Policies Table of Contents Note 1: Summary of significant accounting policies... 3 (a) Basis of preparation... 3 (b) Principles of consolidation... 3

More information

Review of the Accounting Process THE BASIC MODEL

Review of the Accounting Process THE BASIC MODEL THE BASIC MODEL The accounting information system is designed to collect and organize data into information that is useful for stakeholders. The Accounting Equation The basic accounting equation is what

More information

2. The balance in a deferred revenue account represents an amount that is Earned Collected a. Yes Yes b. Yes No c. No Yes d. No No.

2. The balance in a deferred revenue account represents an amount that is Earned Collected a. Yes Yes b. Yes No c. No Yes d. No No. Multiple choice (36%, 2%each): 1. Failure to record the expired amount of prepaid rent expense would not a. understate expense. b. overstate net income. c. overstate owners' equity. d. understate liabilities.

More information

Bonds. Accounting for Long-Term Debt. Agenda Long-Term Debt. 15.501/516 Accounting Spring 2004

Bonds. Accounting for Long-Term Debt. Agenda Long-Term Debt. 15.501/516 Accounting Spring 2004 Accounting for Long-Term Debt 15.501/516 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology April 5, 2004 1 Agenda Long-Term Debt Extend our

More information

COMPONENTS OF THE STATEMENT OF CASH FLOWS

COMPONENTS OF THE STATEMENT OF CASH FLOWS ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling

More information

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Condensed Interim Consolidated Financial Statements of THE BRICK LTD. For the three months ended March 31, 2013 NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS Under National Instrument 51-102,

More information

RAPID REVIEW Chapter Content

RAPID REVIEW Chapter Content RAPID REVIEW BASIC ACCOUNTING EQUATION (Chapter 2) INVENTORY (Chapters 5 and 6) Basic Equation Assets Owner s Equity Expanded Owner s Owner s Assets Equation = Liabilities Capital Drawing Revenues Debit

More information

Vol. 1, Chapter 3 - Accounting Adjustments

Vol. 1, Chapter 3 - Accounting Adjustments Vol. 1, Chapter 3 - Accounting Adjustments Problem 1 1. ($20,000 2,000) 48 = $375 per month 2. Jan. 31 Depreciation Expense $375 Accumulated Depreciation Van $375 To record depreciation expense for January

More information

Consolidated Balance Sheets March 31, 2001 and 2000

Consolidated Balance Sheets March 31, 2001 and 2000 Financial Statements SEIKAGAKU CORPORATION AND CONSOLIDATED SUBSIDIARIES Consolidated Balance Sheets March 31, 2001 and 2000 Assets Current assets: Cash and cash equivalents... Short-term investments (Note

More information

CHAPTER15. Long-Term Liabilities. Acct202 15-1

CHAPTER15. Long-Term Liabilities. Acct202 15-1 CHAPTER15 Long-Term Liabilities Acct202 15-1 15-2 PreviewofCHAPTER15 Bond Basics Bonds are a form of interest-bearing notes payable. Three advantages over common stock: 1. Stockholder control is not affected.

More information

EXPLANATORY NOTES. 1. Summary of accounting policies

EXPLANATORY NOTES. 1. Summary of accounting policies 1. Summary of accounting policies Reporting Entity Taranaki Regional Council is a regional local authority governed by the Local Government Act 2002. The Taranaki Regional Council group (TRC) consists

More information

中 原 大 學 95 學 年 度 轉 學 考 招 生 入 學 考 試

中 原 大 學 95 學 年 度 轉 學 考 招 生 入 學 考 試 中 原 大 學 95 學 年 度 轉 學 考 招 生 入 學 考 試 7 月 12 日 14:00~15:30 商 學 群 組 二 年 級 科 目 : 會 計 學 ( 共 七 頁 第 一 頁 ) 可 使 用 計 算 機, 惟 僅 限 不 具 可 程 式 及 多 重 記 憶 者 一 MULTIPLE CHOICE QUESTIONS: (50%) 誠 實 是 我 們 珍 視 的 美 德, 我 們 喜

More information

Residual carrying amounts and expected useful lives are reviewed at each reporting date and adjusted if necessary.

Residual carrying amounts and expected useful lives are reviewed at each reporting date and adjusted if necessary. 87 Accounting Policies Intangible assets a) Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of identifiable net assets and liabilities of the acquired company

More information

Chapter 6 Statement of Cash Flows

Chapter 6 Statement of Cash Flows Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions

More information

Financial Accounting (Sole Proprietorship)

Financial Accounting (Sole Proprietorship) Financial Accounting (Sole Proprietorship) This course covers the topics shown below. Students navigate learning paths based on their level of readiness. Institutional users may customize the scope and

More information

ACCOUNTING COMPETENCY EXAM SAMPLE EXAM. 2. The financial statement or statements that pertain to a stated period of time is (are) the:

ACCOUNTING COMPETENCY EXAM SAMPLE EXAM. 2. The financial statement or statements that pertain to a stated period of time is (are) the: ACCOUNTING COMPETENCY EXAM SAMPLE EXAM 1. The accounting process does not include: a. interpreting d. observing b. reporting e. classifying c. purchasing 2. The financial statement or statements that pertain

More information

University of Waterloo Final Examination. Term: Fall Year: 2005. Core Concepts of Accounting Information

University of Waterloo Final Examination. Term: Fall Year: 2005. Core Concepts of Accounting Information University of Waterloo Final Examination Term: Fall Year: 2005 Student Name Solution UW Student ID Number Course Abbreviation and Number AFM 101 Course Title Core Concepts of Accounting Information Section(s)

More information

MITSUI SUMITOMO INSURANCE COMPANY, LIMITED AND SUBSIDIARIES. CONSOLIDATED BALANCE SHEETS March 31, 2005 and 2006

MITSUI SUMITOMO INSURANCE COMPANY, LIMITED AND SUBSIDIARIES. CONSOLIDATED BALANCE SHEETS March 31, 2005 and 2006 CONSOLIDATED BALANCE SHEETS March 31, 2005 and 2006 2005 2006 ASSETS Investments - other than investments in affiliates: Securities available for sale: Fixed maturities, at fair value 3,043,851 3,193,503

More information

CHAPTER 15. Stockholders Equity ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Concepts for Analysis. Brief Exercises Exercises Problems

CHAPTER 15. Stockholders Equity ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Concepts for Analysis. Brief Exercises Exercises Problems CHAPTER 15 Stockholders Equity ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis *1. Stockholders rights; corporate form. 1, 2, 3, 4,

More information

The McGraw-Hill Companies, Inc., 2013 Solutions Manual, Vol.2, Chapter 19 19 1

The McGraw-Hill Companies, Inc., 2013 Solutions Manual, Vol.2, Chapter 19 19 1 AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments, and faculty may approach assessment and its documentation

More information

MIDTERM EXAMINATION. Afaaq_tariq@yahoo.com. Fall 2009

MIDTERM EXAMINATION. Afaaq_tariq@yahoo.com. Fall 2009 MIDTERM EXAMINATION Afaaq_tariq@yahoo.com Fall 2009 FIN621- Financial Statement Analysis Asslam O Alikum FIN621- Financial Statement Analysis (Session 3) solved by Afaaq n Shani Bhai with reference n numerical

More information

PART III. Consolidated Financial Statements of Hitachi, Ltd. and Subsidiaries: Independent Auditors Report 47

PART III. Consolidated Financial Statements of Hitachi, Ltd. and Subsidiaries: Independent Auditors Report 47 PART III Item 17. Financial Statements Consolidated Financial Statements of Hitachi, Ltd. and Subsidiaries: Schedule: Page Number Independent Auditors Report 47 Consolidated Balance Sheets as of March

More information

POLICY MANUAL. Financial Management Significant Accounting Policies (July 2015)

POLICY MANUAL. Financial Management Significant Accounting Policies (July 2015) POLICY 1. Objective To adopt Full Accrual Accounting and all other applicable Accounting Standards. 2. Local Government Reference Local Government Act 1995 Local Government (Financial Management) Regulations

More information

LEASES SCOPE/EXCLUSIONS

LEASES SCOPE/EXCLUSIONS LEASES SCOPE/EXCLUSIONS What is a lease? A lease is an agreement whereby the lessor conveys to the lessee in return for a payment or series of payments the right to use an asset for an agreed period of

More information

3,000 3,000 2,910 2,910 3,000 3,000 2,940 2,940

3,000 3,000 2,910 2,910 3,000 3,000 2,940 2,940 1. David Company uses the gross method to record its credit purchases, and it uses the periodic inventory system. On July 21, 20D, the company purchased goods that had an invoice price of $ with terms

More information

The Kansai Electric Power Company, Incorporated and Subsidiaries

The Kansai Electric Power Company, Incorporated and Subsidiaries The Kansai Electric Power Company, Incorporated and Subsidiaries Consolidated Financial Statements for the Years Ended March 31, 2003 and 2002 and for the Six Months Ended September 30, 2003 and 2002 The

More information

CHAPTER 16. Dilutive Securities and Earnings Per Share ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Concepts for Analysis

CHAPTER 16. Dilutive Securities and Earnings Per Share ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Concepts for Analysis CHAPTER 16 Dilutive Securities and Earnings Per Share ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Convertible debt and preferred

More information

West Japan Railway Company

West Japan Railway Company (Translation) Matters to be disclosed on the Internet in accordance with laws and ordinances and the Articles of Incorporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO NON-CONSOLIDATED FINANCIAL

More information

Chapter 14. Leases: Lessor Accounting. 2. Definitions 432. 3. Finance leases 433. 3.1 Overview: recognition and measurement 433. 3.

Chapter 14. Leases: Lessor Accounting. 2. Definitions 432. 3. Finance leases 433. 3.1 Overview: recognition and measurement 433. 3. Leases: Lessor Accounting Reference: IAS 17 Contents: 1. Introduction Page 432 2. Definitions 432 3. Finance leases 433 3.1 Overview: recognition and measurement 433 3.2 Disclosure 433 3.3 If the lessor

More information

Brief Report on Closing of Accounts (connection) for the Term Ended March 31, 2007

Brief Report on Closing of Accounts (connection) for the Term Ended March 31, 2007 MARUHAN Co., Ltd. Brief Report on Closing of (connection) for the Term Ended March 31, 2007 (Amounts less than 1 million yen omitted) 1.Business Results for the term ended on March, 2007 (From April 1,

More information

THE YARMOUTH MUTUAL FIRE INSURANCE COMPANY Financial Statements For the year ended December 31, 2014

THE YARMOUTH MUTUAL FIRE INSURANCE COMPANY Financial Statements For the year ended December 31, 2014 Financial Statements For the year ended Financial Statements For the year ended Table of Contents Page Independent Auditor's Report 2 Statement of Financial Position 3 Statement of Comprehensive Income

More information

is any organization for which financial statements are prepared. Reports of the amounts of assets, liabilities and equity as of one point in time.

is any organization for which financial statements are prepared. Reports of the amounts of assets, liabilities and equity as of one point in time. Accounting Balance Sheet Entity Balance Sheet is any organization for which financial statements are prepared. Reports of the amounts of assets, liabilities and equity as of one point in time. Left side

More information

ACCT 335 Chapter 7 Pre-Assigned Problems Suggested Solutions

ACCT 335 Chapter 7 Pre-Assigned Problems Suggested Solutions ACCT 335 Chapter 7 Pre-Assigned Problems Suggested Solutions PROBLEM 7-2 (a) Sales $1,980,000 Sales discounts 4,400 Sales returns and allowances 60,000 Net sales 1,915,600 Percentage 1 1/2% Bad debt expense

More information

Unit 6 Receivables. Receivables - Claims resulting from credit sales to customers and others goods or services for money,.

Unit 6 Receivables. Receivables - Claims resulting from credit sales to customers and others goods or services for money,. Unit 6 Receivables 7-1 Receivables - Claims resulting from credit sales to customers and others goods or services for money,. Oral promises of the purchaser to pay for goods and services sold (credit sale;

More information

1 CONSOLIDATED FINANCIAL STATEMENTS (1) Consolidated Balance Sheets

1 CONSOLIDATED FINANCIAL STATEMENTS (1) Consolidated Balance Sheets 1 CONSOLIDATED FINANCIAL STATEMENTS (1) Consolidated Balance Sheets As of March 31,2014 As of March 31,2015 Assets Cash and due from banks 478,425 339,266 Call loans and bills bought 23,088 58,740 Monetary

More information

Chapter 21 The Statement of Cash Flows Revisited

Chapter 21 The Statement of Cash Flows Revisited Chapter 21 The Statement of Cash Flows Revisited AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments,

More information

CHAPTER 10 Reporting and Analyzing Liabilities. Accounting for Notes Payable Obligations in the form of written notes are recorded as notes payable.

CHAPTER 10 Reporting and Analyzing Liabilities. Accounting for Notes Payable Obligations in the form of written notes are recorded as notes payable. CHAPTER 10 Reporting and Analyzing Liabilities Accounting for Notes Payable Obligations in the form of written notes are recorded as notes payable. Notes payable usually require the borrower to pay interest

More information

TOPIC LEARNING OBJECTIVE

TOPIC LEARNING OBJECTIVE Topic Mapping 1 Transaction Analysis Understand the effect of various types of transactions on the accounting equation, accounting journal and accounting ledger. Concepts and Skills Accounting Equation

More information

(a) (i) Marking Scheme: 1 mark for definition and 1 mark for example.

(a) (i) Marking Scheme: 1 mark for definition and 1 mark for example. T A S M A N I A N Accounting C E R T I F I C A T E Subject Code ACC5C O F E D U C A T I O N Question 1 T A S M A N I A N Q U A L I F I C A T I O N S A U T H O R I T Y (a) (i) Marking Scheme: 1 mark for

More information

Large Company Limited. Report and Accounts. 31 December 2009

Large Company Limited. Report and Accounts. 31 December 2009 Registered number 123456 Large Company Limited Report and Accounts 31 December 2009 Report and accounts Contents Page Company information 1 Directors' report 2 Statement of directors' responsibilities

More information

DTS CORPORATION and Consolidated Subsidiaries. Unaudited Quarterly Consolidated Financial Statements for the Three Months Ended June 30, 2008

DTS CORPORATION and Consolidated Subsidiaries. Unaudited Quarterly Consolidated Financial Statements for the Three Months Ended June 30, 2008 DTS CORPORATION and Consolidated Subsidiaries Unaudited Quarterly Consolidated Financial Statements for the Three Months Ended June 30, 2008 DTS CORPORATION and Consolidated Subsidiaries Quarterly Consolidated

More information

Consolidated Financial Statements

Consolidated Financial Statements Consolidated Financial Statements For the year ended February 20, 2016 Nitori Holdings Co., Ltd. Consolidated Balance Sheet Nitori Holdings Co., Ltd. and consolidated subsidiaries As at February 20, 2016

More information

Notes to Consolidated Financial Statements Notes to Non-Consolidated Financial Statements

Notes to Consolidated Financial Statements Notes to Non-Consolidated Financial Statements [Translation: Please note that the following purports to be a translation from the Japanese original Notice of Convocation of the Annual General Meeting of Shareholders 2013 of Chugai Pharmaceutical Co.,

More information

中 原 大 學 97 學 年 度 碩 士 班 入 學 考 試

中 原 大 學 97 學 年 度 碩 士 班 入 學 考 試 中 原 大 學 97 學 年 度 碩 士 班 入 學 考 試 4 月 13 日 11:00~12:30 會 計 學 系 甲 組 誠 實 是 我 們 珍 視 的 美 德, 我 們 喜 愛 拒 絕 作 弊, 堅 守 正 直 的 你! 科 目 : 中 級 會 計 學 ( 共 4 頁 第 1 頁 ) 可 使 用 計 算 機, 惟 僅 限 不 具 可 程 式 及 多 重 記 憶 者 不 可 使 用 計 算 機

More information

Tax Implications of Significant PFRS Standards

Tax Implications of Significant PFRS Standards Tax Implications of Significant PFRS Standards Ma. Victoria C. Españo PICPA National Annual Convention Iloilo City, 2010 PFRS and Tax Laws Philippine Financial Reporting Standards (PFRS) set of rules to

More information

CASH FLOW STATEMENT & BALANCE SHEET GUIDE

CASH FLOW STATEMENT & BALANCE SHEET GUIDE CASH FLOW STATEMENT & BALANCE SHEET GUIDE The Agriculture Development Council requires the submission of a cash flow statement and balance sheet that provide annual financial projections for the business

More information

Statements MAKEorBREAK Sample Questions

Statements MAKEorBREAK Sample Questions Castle 2.3 Statements Got the answer? Be the first to stand with your group s flag. Got it correct? MAKE or BREAK a castle, yours or any other group s. The group with the most castles wins. Enjoy! Question

More information

a. $ 65,000. b. $ 80,000. c. $130,000. d. $145,000.

a. $ 65,000. b. $ 80,000. c. $130,000. d. $145,000. 注 意 1. 本 試 題 卷 共 50 題, 總 分 100 分 第 01-15 題, 每 題 1.75 分, 合 計 26.25 分 ; 第 16-35 題, 每 題 2 分, 合 計 40 分 ; 第 36-50 題, 每 題 2.25 分, 合 計 33.75 答 錯 不 倒 扣 2. 請 將 答 案 按 試 題 題 號, 依 序 填 入 答 案 卡 1.FastForward had cash

More information

Appendix 16: Chart of Accounts for Small Business Investment Companies

Appendix 16: Chart of Accounts for Small Business Investment Companies Appendix 16: Chart of Accounts for Small Business Investment Companies 10 06 A A. Account Numbering System. This system provides for two-digit number designations for major categories under which accounts

More information

ACCOUNTING 105 CONCEPTS REVIEW

ACCOUNTING 105 CONCEPTS REVIEW ACCOUNTING 105 CONCEPTS REVIEW A note from the tutors: This handout is designed to help you review important information as you study for your cumulative final exam. While it does cover many important

More information

Consolidated Balance Sheets

Consolidated Balance Sheets Consolidated Balance Sheets March 31 2015 2014 2015 Assets: Current assets Cash and cash equivalents 726,888 604,571 $ 6,057,400 Marketable securities 19,033 16,635 158,608 Notes and accounts receivable:

More information

Understanding Cash Flow Statements

Understanding Cash Flow Statements Understanding Cash Flow Statements 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Components and Format of the Cash Flow Statement... 3 3. The

More information

Notes to Consolidated Financial Statements Notes to Non-consolidated Financial Statements

Notes to Consolidated Financial Statements Notes to Non-consolidated Financial Statements This document has been translated from the Japanese original for reference purposes only. In the event of discrepancy between this translated document and the Japanese original, the original shall prevail.

More information

Accounting 500 4A Balance Sheet Page 1

Accounting 500 4A Balance Sheet Page 1 Accounting 500 4A Balance Sheet Page 1 I. PURPOSE A. The Balance Sheet shows the financial position of the company at a specific point in time (a date) 1. This differs from the Income Statement which measures

More information

Financial Statements

Financial Statements Financial Statements Years ended March 31,2002 and 2003 Contents Consolidated Financial Statements...1 Report of Independent Auditors on Consolidated Financial Statements...2 Consolidated Balance Sheets...3

More information

Ricoh Company, Ltd. INTERIM REPORT (Non consolidated. Half year ended September 30, 2000)

Ricoh Company, Ltd. INTERIM REPORT (Non consolidated. Half year ended September 30, 2000) Ricoh Company, Ltd. INTERIM REPORT (Non consolidated. Half year ended September 30, 2000) *Date of approval for the financial results for the half year ended September 30, 2000, at the Board of Directors'

More information

Long Island University C.W. Post GBA 521. Final Exam - review

Long Island University C.W. Post GBA 521. Final Exam - review Long Island University C.W. Post GBA 521 Name: _ (Last name) (First name) Date: _ Final Exam - review Multiple Choice Following are 14 multiple choice questions, worth 3 points each. Clearly identify the

More information

Chapter Twelve. Current Liabilities. Current Liabilities for Competing Companies

Chapter Twelve. Current Liabilities. Current Liabilities for Competing Companies Chapter Twelve Current Liabilities and Contingencies 1. Define current liabilities & identify common CL 2. Account for accruals 3. Account for deferrals 4. Account for compensated absences 5. How to report

More information

Statement of Financial Accounting Standards No. 25. Statement of Financial Accounting Standards No.25. Business Combinations

Statement of Financial Accounting Standards No. 25. Statement of Financial Accounting Standards No.25. Business Combinations Statement of Financial Accounting Standards No. 25 Statement of Financial Accounting Standards No.25 Business Combinations Revised on 30 November 2006 Translated by Ling-Tai Lynette Chou, Professor (National

More information

EXERCISES. The cash from operating activities detail is provided as follows for class discussion:

EXERCISES. The cash from operating activities detail is provided as follows for class discussion: EXERCISES Ex. 14 1 There were net additions, such as depreciation and amortization of intangible assets of $389 million, to the net loss reported on the income statement to convert the net loss from the

More information

WIPRO DOHA LLC FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2016

WIPRO DOHA LLC FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2016 WIPRO DOHA LLC FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2016 WIPRO DOHA LLC BALANCE SHEET (Amount in ` except share and per share data, unless otherwise stated) As at March 31, 2016

More information

Principles of Financial Accounting ACC-101-TE. TECEP Test Description

Principles of Financial Accounting ACC-101-TE. TECEP Test Description Principles of Financial Accounting ACC-101-TE TECEP Test Description This TECEP is an introduction to the field of financial accounting. It covers the accounting cycle, merchandising concerns, and financial

More information

STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION. BALANCE SHEET As of

STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION. BALANCE SHEET As of STATE OF FLORIDA DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION BALANCE SHEET As of ASSETS CURRENT ASSETS Cash and Cash Equivalents Cash - Restricted Accounts Receivable - Trade Accounts Receivable

More information

Overview of Business Results for the 2nd Quarter of Fiscal Year Ending March 31, 2012 (2Q FY2011)

Overview of Business Results for the 2nd Quarter of Fiscal Year Ending March 31, 2012 (2Q FY2011) November 8, 2011 Overview of Business Results for the 2nd Quarter of Fiscal Year Ending March 31, 2012 () Name of the company: Iwatani Corporation Share traded: TSE, OSE, and NSE first sections Company

More information

SunGard Brokerage & Securities Services, LLC Unaudited Statement of Financial Condition June 30, 2013

SunGard Brokerage & Securities Services, LLC Unaudited Statement of Financial Condition June 30, 2013 Unaudited Statement of Financial Condition Index Page(s) Financial Statements Statement of Financial Condition... 3 Notes to the Financial Statements... 4 9 Statement of Financial Condition Assets Note(s)

More information

Exercises: Set B. 50 chapter 12 Statement of Cash Flows

Exercises: Set B. 50 chapter 12 Statement of Cash Flows 50 chapter 12 Statement of Cash Flows Classify transactions by type of activity. (LO 2), C Classify transactions by type of activity. (LO 2), C Exercises: Set B E12-1B Strawn Corporation had these transactions

More information

Transition to International Financial Reporting Standards

Transition to International Financial Reporting Standards Transition to International Financial Reporting Standards Topps Tiles Plc In accordance with IFRS 1, First-time adoption of International Financial Reporting Standards ( IFRS ), Topps Tiles Plc, ( Topps

More information

Consolidated financial summary

Consolidated financial summary 1-8-1 Marunouchi Chiyoda-ku Tokyo 100-8289, Japan (URL http://www.daiwasmbc.co.jp/) Consolidated financial summary (For fiscal year ended March 31, 2005) April 27, 2005 (1)Consolidated Operating results

More information

Consolidated Balance Sheet

Consolidated Balance Sheet Consolidated Balance Sheet (As of March 31, 2010) Item Amount Item Amount [Assets] million yen [Liabilities] million yen Current assets 12,277Current liabilities 7,388 Notes payable and accounts 2,449

More information

FINANCIAL STATEMENT 2010

FINANCIAL STATEMENT 2010 FINANCIAL STATEMENT 2010 CONTENTS Independent Auditors Report------------------------------ 2 Consolidated Balance Sheets ------------------------------ 3 Consolidated Statements of Operations ----------------

More information

Consolidated Financial Statements. Nippon Unipac Holding and Consolidated Subsidiaries

Consolidated Financial Statements. Nippon Unipac Holding and Consolidated Subsidiaries Consolidated Financial Statements Nippon Unipac Holding and Consolidated Subsidiaries Period from March 30, 2001 (date inception) to September 30, 2001 Nippon Unipac Holding and Consolidated Subsidiaries

More information

Investments and advances... 313,669

Investments and advances... 313,669 Consolidated Financial Statements of the Company The consolidated balance sheet, statement of income, and statement of equity of the Company are as follows. Please note the Company s consolidated financial

More information

SAMPLE MANUFACTURING COMPANY LIMITED CONSOLIDATED FINANCIAL STATEMENTS. Year ended December 31, 2011

SAMPLE MANUFACTURING COMPANY LIMITED CONSOLIDATED FINANCIAL STATEMENTS. Year ended December 31, 2011 SAMPLE MANUFACTURING COMPANY LIMITED CONSOLIDATED FINANCIAL STATEMENTS Year ended SAMPLE MANUFACTURING COMPANY LIMITED CONSOLIDATED FINANCIAL STATEMENTS For the year ended The information contained in

More information

Reporting and Interpreting Liabilities Irwin/McGraw-Hill

Reporting and Interpreting Liabilities Irwin/McGraw-Hill Chapter 9 Reporting and Interpreting Liabilities Business Background The acquisition of assets is financed from two sources: Debt - funds from creditors Equity - funds from owners Business Background The

More information

Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises

Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises Financial Reporting & Analysis Chapter 17 Solutions Statement of Cash Flows Exercises Exercises E17-1. Determining cash flows from operations Using the indirect method, cash flow from operations is computed

More information

Cash is King. cash flow is less likely to be affected

Cash is King. cash flow is less likely to be affected Reading 27: Understanding Cash Flow Statements Relevance of Cash Flow The primary purpose of the statement of cash flows (SCF) is to provide: Info about a firm s cash receipts & cash payments during an

More information

Lane County, Oregon Statement of Net Assets June 30, 2010. Governmental Activities. Business-type

Lane County, Oregon Statement of Net Assets June 30, 2010. Governmental Activities. Business-type Statement of Net Assets June 30, 2010 Governmental Activities Business-type Activities Assets Current assets Cash and cash equivalents $ 152,238,503 $ 32,077,526 $ 184,316,029 Investments - 3,748,272 3,748,272

More information

Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows

Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows Contents Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows Paragraphs OBJECTIVE SCOPE 1 3 BENEFITS OF CASH FLOW INFORMATION 4 5 DEFINITIONS 6 9 Cash and cash equivalents 7 9 PRESENTATION OF

More information

NUVISTA ENERGY LTD. Consolidated Statements of Financial Position (unaudited)

NUVISTA ENERGY LTD. Consolidated Statements of Financial Position (unaudited) NUVISTA ENERGY LTD. Consolidated Statements of Financial Position (unaudited) ($Cdn thousands) Assets Current assets Cash and cash equivalents $ - $ - Accounts receivable and prepaids 35,443 30,317 Assets

More information

NUVISTA ENERGY LTD. Consolidated Statements of Financial Position (unaudited)

NUVISTA ENERGY LTD. Consolidated Statements of Financial Position (unaudited) NUVISTA ENERGY LTD. Consolidated Statements of Financial Position (unaudited) ($Cdn thousands) Assets Current assets Cash and cash equivalents $ - $ - Accounts receivable and prepaids 42,980 30,317 Assets

More information

INDUSTRIAL-ALLIANCE LIFE INSURANCE COMPANY. FIRST QUARTER 2000 Consolidated Financial Statements (Non audited)

INDUSTRIAL-ALLIANCE LIFE INSURANCE COMPANY. FIRST QUARTER 2000 Consolidated Financial Statements (Non audited) INDUSTRIAL-ALLIANCE LIFE INSURANCE COMPANY FIRST QUARTER 2000 Consolidated Financial Statements (Non audited) March 31,2000 TABLE OF CONTENTS CONSOLIDATED INCOME 2 CONSOLIDATED CONTINUITY OF EQUITY 3 CONSOLIDATED

More information

Management Accounting Financial Strategy

Management Accounting Financial Strategy PAPER P9 Management Accounting Financial Strategy The Examiner provides a short study guide, for all candidates revising for this paper, to some first principles of finance and financial management Based

More information

Cash Flow Statements

Cash Flow Statements Compiled Accounting Standard AASB 107 Cash Flow Statements This compiled Standard applies to annual reporting periods beginning on or after 1 July 2007. Early application is permitted. It incorporates

More information

Equipment Lease With a Service Component

Equipment Lease With a Service Component Equipment Lease With a Service Component **Disclaimer The exposure draft received nearly 700 letters of comment through the comment period ended December 15, 2010. There is some expectation that key features

More information

Chapter. Statement of Cash Flows For Single Company

Chapter. Statement of Cash Flows For Single Company Chapter 4 Statement of Cash Flows For Single Company 4.1 Single company statement of cash flows Statement of cash flows are primary financial statements and are required along side the income statement

More information

Chapter 8 Accounting for Receivable

Chapter 8 Accounting for Receivable Chapter 8 Accounting for Receivable Type of receivable: Receivable refers to amounts due from individuals and companies. o Account receivable: Amount customer owe on account, result from sales of goods

More information

Chapter 3 the balance sheet and the statement of changes in stockholder. equity

Chapter 3 the balance sheet and the statement of changes in stockholder. equity Full Picture for Intermediate Accounting (I) Chapter 3 the balance sheet ASSET LIABILITY Current Chapter 6 cash and receivables Chapter 7/8 inventories Chapter 12 current liabilities and contingencies

More information