Chapter 10. Long-Term Debt Financing. Albrecht, Stice, Stice, Swain
|
|
- Morgan Hopkins
- 7 years ago
- Views:
Transcription
1 Chapter 10 Long-Term Debt Financing Albrecht, Stice, Stice, Swain COPYRIGHT 2008 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. 1
2 Present Values The value today of $1 to be received or paid in the future, given a specified interest rate. $90.91 One Year Period at 10% rate $100 Present Value $90.91 is the present value of $100 received in one year. 2
3 Future Values The value in the future of $1 to be received or paid today, given a specified interest rate. $90.91 One Year Period at 10% rate $100 Future Value $100 is the future value in one year of $90.91 paid or invested today. 3
4 Computing Present Values Using present value tables (Table I): Period 7% 8% 9% 10% 12% Choose the time period and interest rate used. Multiply the factor by the amount to be received in the future. $100 X = $
5 Computing Future Values Using future value tables (Table III): Period 7% 8% 9% 10% 12% Choose the time period and interest rate used. Multiply the factor by the amount invested today. $90.91 X 1.10 = $100 5
6 Annuities A series of equal amounts to be received or paid at the end of equal time periods. Present values or future values can be computed for annuities. Use number of periods and rate to find appropriate factor. Multiply the factor by the annuity (payment) amount. Present value factor of annuity (Table II) X Payment = Present value 6
7 Notes Payable Long-term debt that is paid back at the end of the loan term. Interest is usually paid throughout the loan period. To record a loan from the bank (2 year 10% loan): Cash ,000 Notes Payable ,000 To record the interest for year 1: Interest Expense ,000 Cash ,000 To record the repayment of the loan and year 2 interest: Notes Payable ,000 Interest Expense ,000 Cash ,000 7
8 Mortgages A written promise to pay a stated amount of money. Secured by the pledging of certain assets. Liability recorded on the balance sheet is the amount borrowed (which is also the present value of the future payments). A company takes out a 30-year, $100,000 mortgage with monthly payments. The interest rate on the mortgage is 8%. The monthly payments are $733.76: Cash ,000 Mortgage Payable ,000 8
9 Mortgage Amortization Part of each mortgage payment pays off interest due and part of the payment reduces the principal amount due. A schedule can be prepared showing the portions of each payment that are principal and interest. Interest Principal Balance Payment (Balance X Interest Rate) (Payment Interest) 100, , , , , , ,
10 Mortgage Amortization Interest Principal Balance Payment (Balance X Interest Rate) (Payment Interest) 100, , , , , , , Recording the payment for month 5: Interest Expense Mortgage Payable Cash
11 Capital leases Leases Asset and obligation reported on the balance sheet are the present value of the future lease payments. Yearly interest expense based off of remaining lease liability balance (like mortgage amortization). Leased equipment for $10,000 a year, discounted at 14%: Leased Equipment ,161 Lease Liability ,161 Record interest expense and first $10,000 payment: Interest Expense ,303 Lease Liability ,697 Cash ,000 (Interest expense = 52,161 X 0.14 = 7,303) 11
12 Bonds Bond A contract between the borrowing company (issuer) and the lender (investor) in which the borrower promises to pay a specified amount of interest at the end of each period for which the bond is outstanding. The principal is then paid back at maturity. Debentures Bonds that have no underlying assets pledged as collateral. Secured bonds Bonds that have assets pledged as protection for lenders. Registered bonds The issuing company keeps a record of the names of bondholders. Those registered bondholders are paid interest. Coupon bonds The issuing company has no record of the bondholders. Current bondholders redeem coupons for interest payments. 12
13 More Bond Terms Term bonds Bonds that mature in one single sum on a future specified date. Serial bonds Bonds that mature in a series of installments. Callable bonds Bonds that can be redeemed any time at a specified price. Convertible bonds Bonds that can be converted to other securities (i.e. preferred stock or common stock) at the option of the bond holder. Zero coupon bonds Bonds issued with no promise of payment. Junk bonds High-risk bonds issued by a company with a lot of outstanding debt or in a weak financial position. 13
14 Characteristics of Bonds Face value or maturity value The principal amount that will be repaid at maturity. Usually issued in $1,000 increments. Stated rate of interest The amount of interest the company promises to pay. Market rate of interest What the market is paying for bonds of a similar nature. 14
15 Bond Issuance The bond s face value and future interest payments (face value X stated rate of interest) are discounted by the market rate of interest to arrive at the issuance price. If the stated rate of interest is LESS than the market rate of interest, the bond is issued at a DISCOUNT. If the stated rate of interest is MORE than the market rate of interest, the bond is issued at a PREMIUM. 15
16 Bonds Issued at Face Value Sayer Co. issues $100,000, 5-year bonds with a stated rate of interest of 10%. The effective rate (market rate of interest) is also 10%. 1. Semiannual interest payment ,000 Present value of an annuity of 10 payments of $1 at 5% (Table II) X , Maturity value of bond ,000 Present value of $1 received 10 periods in the future discounted at 5% (Table I).... X , Issuance price of bond ,000 16
17 Bonds Issued at a Discount Sayer Co. issues $100,000, 5-year bonds with a stated rate of interest of 10%. The effective rate is 12%. 1. Semiannual interest payment ,000 Present value of an annuity of 10 payments of $1 at 6% (Table II) X , Maturity value of bond ,000 Present value of $1 received 10 periods in the future discounted at 6% (Table I).... X , Issuance price of bond ,640 17
18 Bonds Issued at a Premium Sayer Co. issues $100,000, 5-year bonds with a stated rate of interest of 10%. The effective rate is 8%. 1. Semiannual interest payment ,000 Present value of an annuity of 10 payments of $1 at 4% (Table II) X , Maturity value of bond ,000 Present value of $1 received 10 periods in the future discounted at 4% (Table I).... X , Issuance price of bond ,114 18
19 Accounting for Bonds Bonds issued at face value: Issuance of bond: Cash ,000 Bonds Payable ,000 Make semiannual interest payment: Interest Expense ,000 Cash ,000 Retirement of bond: Bonds Payable ,000 Cash ,000 19
20 Early Retirement of Bonds Bonds are sometimes retired before maturity. The difference between the face value and the price paid to retire the bonds is recognized as a gain or loss. Retirement of Sayer Co. bond at 105: Bonds Payable ,000 Loss on Bond Retirement ,000 Cash ,000 20
21 Debt-Related Financial Ratios Debt ratio Represents the amount of assets financed through debt. Debt-to-equity ratio Total Liabilities Total Assets The number of dollars of debt for every dollar invested by stockholders. Total Liabilities Total Stockholders Equity 21
22 Times Interest Earned Times Interest Earned Ratio The ratio of the income that is available for interest payments. Earnings Before Interest and Taxes Interest Expense Measures how much a cushion has in making its interest payments. The higher the better. 22
23 Bonds Issued at a Discount or Premium Using the Sayer Co. examples, Bonds issued at a discount: Issuance of bonds: Cash ,640 Discount on Bonds ,360 Bonds Payable ,000 Bonds issued at a premium: Issuance of bonds: Cash ,114 Premium on Bonds ,114 Bonds Payable ,000 23
24 Straight-Line Amortization The discount or premium needs to be amortized over the life of the bond so the value of the bond is equal to the face value at maturity. Straight-line amortization Divide the discount or premium by the number of interest periods and recognize that amount as extra interest expense (for discounts) or less interest expense (for premiums). 24
25 Straight-Line Amortization Bonds issued at a discount: Discount ,360 Number of semiannual periods Payment of semiannual interest: Interest Expense ,736 Discount on Bonds Cash ,000 The same entry would be made for each interest payment. A similar entry would be made to amortize a premium, but the premium would be debited and interest expense would be reduced. 25
26 Effective Interest Amortization Amortizes a varying amount of discount or premium each period. This amount is the difference between the interest actually incurred and the cash actually paid (like the amortization schedule for the mortgage). Interest actually incurred is the bond carrying value multiplied by the effective interest rate. 26
27 Effective Interest Amortization For Bond issued at premium: Interest Incurred Amortization of Premium Bond Carrying (Bond Carrying Value X (Interest Incurred Value Payment Effective Interest Rate) Payment) 108, ,000 4, , ,000 4, , ,000 4, , ,000 4, , ,000 4, ,456 4 th Payment of semiannual interest: Interest Expense ,240 Premium on Bonds Cash ,000 27
28 Retirement of Bonds with a Discount or a Premium Retirement at maturity is the same as at face value because the discount or premium is amortized to zero at maturity. Sayer Co. desires to retire its 5-year bonds issued at a premium after 2 years (4 payments). The bonds are retired at 105: Retirement of Sayer Co. bond at 105: Bonds Payable ,000 Premium on Bonds ,246 Gain on Bond Retirement Cash ,000 28
Chapter 16. Debentures: An Introduction. Non-current Liabilities. Horngren, Best, Fraser, Willett: Accounting 6e 2010 Pearson Australia.
PowerPoint to accompany Non-current Liabilities Chapter 16 Learning Objectives 1. Account for debentures payable transactions 2. Measure interest expense by the straight line interest method 3. Account
More informationClick Here to Buy the Tutorial
FIN 534 Week 4 Quiz 3 (Str) Click Here to Buy the Tutorial http://www.tutorialoutlet.com/fin-534/fin-534-week-4-quiz-3- str/ For more course tutorials visit www.tutorialoutlet.com Which of the following
More informationChapter 11. Long-Term Liabilities Notes, Bonds, and Leases
1 Chapter 11 Long-Term Liabilities Notes, Bonds, and Leases 2 Long-Term Liabilities 3 Economic Consequences of Reporting Long-Term Liabilities Improved credit ratings can lead to lower borrowing costs
More informationChapter 9 Bonds and Their Valuation ANSWERS TO SELECTED END-OF-CHAPTER QUESTIONS
Chapter 9 Bonds and Their Valuation ANSWERS TO SELECTED END-OF-CHAPTER QUESTIONS 9-1 a. A bond is a promissory note issued by a business or a governmental unit. Treasury bonds, sometimes referred to as
More informationLong-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 informationBonds. 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 informationModule 1: Corporate Finance and the Role of Venture Capital Financing TABLE OF CONTENTS
1.0 ALTERNATIVE SOURCES OF FINANCE Module 1: Corporate Finance and the Role of Venture Capital Financing Alternative Sources of Finance TABLE OF CONTENTS 1.1 Short-Term Debt (Short-Term Loans, Line of
More information3,000 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 informationModule 8: Current and long-term liabilities
Module 8: Current and long-term liabilities Module 8: Current and long-term liabilities Overview In previous modules, you learned how to account for assets. Assets are what a business uses or sells to
More informationAUDITOR S REPORT. To the Members of the Legislative Assembly Province of Saskatchewan
AUDITOR S REPORT To the Members of the Legislative Assembly Province of Saskatchewan We have audited the statement of financial position of the Education Infrastructure Financing Corporation as at March
More informationCurrent liabilities and payroll
Chapter 12 Current liabilities and payroll Current liabilities are obligations that the business has to discharge within 12 months or its operating cycle if longer than one year. Obligations that are due
More informationCurrent liabilities - Obligations that are due within one year. Obligations due beyond that period of time are classified as long-term liabilities.
Accounting Fundamentals Lesson 8 8.0 Liabilities Current liabilities - Obligations that are due within one year. Obligations due beyond that period of time are classified as long-term liabilities. Current
More informationANALYSIS OF FIXED INCOME SECURITIES
ANALYSIS OF FIXED INCOME SECURITIES Valuation of Fixed Income Securities Page 1 VALUATION Valuation is the process of determining the fair value of a financial asset. The fair value of an asset is its
More informationChapter 5: Valuing Bonds
FIN 302 Class Notes Chapter 5: Valuing Bonds What is a bond? A long-term debt instrument A contract where a borrower agrees to make interest and principal payments on specific dates Corporate Bond Quotations
More informationFin 3312 Sample Exam 1 Questions
Fin 3312 Sample Exam 1 Questions Here are some representative type questions. This review is intended to give you an idea of the types of questions that may appear on the exam, and how the questions might
More information6. 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 informationCHAPTER 13 AUDITING DEBT OBLIGATIONS AND STOCKHOLDERS EQUITY TRANSACTIONS
A U D I T I N G A RISK-BASED APPROACH TO CONDUCTING A QUALITY AUDIT 9 th Edition Karla M. Johnstone Audrey A. Gramling Larry E. Rittenberg CHAPTER 13 AUDITING DEBT OBLIGATIONS AND STOCKHOLDERS EQUITY TRANSACTIONS
More informationChapter 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 informationThe Concept of Present Value
The Concept of Present Value If you could have $100 today or $100 next week which would you choose? Of course you would choose the $100 today. Why? Hopefully you said because you could invest it and make
More informationIn October 1997, Hewlett-Packard issued zero coupon bonds with a face value of $1.8 million, due in 2017, for proceeds of $968 million.
BE11-2 In October 1997, Hewlett-Packard issued zero coupon bonds with a face value of $1.8 million, due in 2017, for proceeds of $968 million. (a) What is the life of these bonds? The life of the bonds
More informationBusiness 2019 Finance I Lakehead University. Midterm Exam
Business 2019 Finance I Lakehead University Midterm Exam Philippe Grégoire Fall 2002 Time allowed: 2 hours. Instructions: Calculators are permitted. One 8.5 11 inches crib sheet is allowed. Verify that
More informationUS TREASURY SECURITIES - Issued by the U.S. Treasury Department and guaranteed by the full faith and credit of the United States Government.
Member NASD/SIPC Bond Basics TYPES OF ISSUERS There are essentially five entities that issue bonds: US TREASURY SECURITIES - Issued by the U.S. Treasury Department and guaranteed by the full faith and
More informationAppendix C- 1. Time Value of Money. Appendix C- 2. Financial Accounting, Fifth Edition
C- 1 Time Value of Money C- 2 Financial Accounting, Fifth Edition Study Objectives 1. Distinguish between simple and compound interest. 2. Solve for future value of a single amount. 3. Solve for future
More informationIntroduction to Convertible Debentures
Introduction to Convertible Debentures Intro to Convertible Debentures March, 2009 Convertible debentures are hybrid securities which offer advantages of both bonds and equities. Like ordinary bonds they
More informationIntercompany Indebtedness. Chapter 8. Intercompany Indebtedness. Consolidation Overview. Consolidation Overview. Intercompany Indebtedness
Chapter 8 Intercompany Indebtedness Intercompany Indebtedness One advantage of having control over other companies is that management has the ability to transfer resources from one legal entity to another
More informationChapter 4 Bonds and Their Valuation ANSWERS TO END-OF-CHAPTER QUESTIONS
Chapter 4 Bonds and Their Valuation ANSWERS TO END-OF-CHAPTER QUESTIONS 4-1 a. A bond is a promissory note issued by a business or a governmental unit. Treasury bonds, sometimes referred to as government
More informationAccounting for and Presentation of Liabilities
7 Accounting for and Presentation of Liabilities Liabilities are obligations of the entity or, as defined by the FASB, probable future sacrifices of economic benefits arising from present obligations of
More informationTopics in Chapter. Key features of bonds Bond valuation Measuring yield Assessing risk
Bond Valuation 1 Topics in Chapter Key features of bonds Bond valuation Measuring yield Assessing risk 2 Determinants of Intrinsic Value: The Cost of Debt Net operating profit after taxes Free cash flow
More informationDick Schwanke Finite Math 111 Harford Community College Fall 2013
Annuities and Amortization Finite Mathematics 111 Dick Schwanke Session #3 1 In the Previous Two Sessions Calculating Simple Interest Finding the Amount Owed Computing Discounted Loans Quick Review of
More information2. Determine the appropriate discount rate based on the risk of the security
Fixed Income Instruments III Intro to the Valuation of Debt Securities LOS 64.a Explain the steps in the bond valuation process 1. Estimate the cash flows coupons and return of principal 2. Determine the
More informationChapter 6 Interest rates and Bond Valuation. 2012 Pearson Prentice Hall. All rights reserved. 4-1
Chapter 6 Interest rates and Bond Valuation 2012 Pearson Prentice Hall. All rights reserved. 4-1 Interest Rates and Required Returns: Interest Rate Fundamentals The interest rate is usually applied to
More informationAppendix. Time Value of Money. Financial Accounting, IFRS Edition Weygandt Kimmel Kieso. Appendix C- 1
C Time Value of Money C- 1 Financial Accounting, IFRS Edition Weygandt Kimmel Kieso C- 2 Study Objectives 1. Distinguish between simple and compound interest. 2. Solve for future value of a single amount.
More informationHow To Value Bonds
Chapter 6 Interest Rates And Bond Valuation Learning Goals 1. Describe interest rate fundamentals, the term structure of interest rates, and risk premiums. 2. Review the legal aspects of bond financing
More informationREVIEW FOR FINAL EXAM, ACCT-2302 (SAC)
REVIEW FOR FINAL EXAM, ACCT-2302 (SAC) CHAPTER 13 1. Corporate Organization: a. Application for incorporation. b. State grants Charter or Articles of Incorporation. c. By-laws: rules and procedures of
More informationCHAPTER 14. Long-Term Liabilities 1, 10, 14, 20 2, 3, 4, 9, 10, 11 1, 2, 3, 4, 5, 6, 7 5, 6, 7, 8, 11 3, 4, 6, 7, 8, 10 12, 13 11 12, 13, 14, 15
CHAPTER 14 Long-Term Liabilities ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Long-term liability; classification; definitions.
More informationChapter 11. Stocks and Bonds. How does this distribution work? An example. What form do the distributions to common shareholders take?
Chapter 11. Stocks and Bonds Chapter Objectives To identify basic shareholder rights and the means by which corporations make distributions to shareholders To recognize the investment opportunities in
More informationAppraisal A written analysis prepared by a qualified appraiser and estimating the value of a property
REAL ESTATE BASICS Affordability Analysis An analysis of a buyer s ability to afford the purchase of a home, reviews income, liabilities, and available funds, and considers the type of mortgage a buyer
More informationChapter. Investing in Bonds. 13.1 Evaluating Bonds 13.2 Buying and Selling Bonds. 2010 South-Western, Cengage Learning
Chapter 13 Investing in Bonds 13.1 Evaluating Bonds 13.2 Buying and Selling Bonds 2010 South-Western, Cengage Learning Standards Standard 4.0 Investigate opportunities available for saving and investing.
More informationASPE AT A GLANCE Section 3856 Financial Instruments
ASPE AT A GLANCE Section 3856 Financial Instruments December 2014 Section 3856 Financial Instruments Effective Date Fiscal years beginning on or after January 1, 2011 1 SCOPE Applies to all financial instruments
More informationBonds, in the most generic sense, are issued with three essential components.
Page 1 of 5 Bond Basics Often considered to be one of the most conservative of all investments, bonds actually provide benefits to both conservative and more aggressive investors alike. The variety of
More informationAccounting for Bonds and Long-Term Notes
Accounting for Bonds and Long-Term Notes Bond Premiums and Discounts Effective interest method Bond issuance Interest expense Types of Debt Instruments Zero-Coupon Bonds Convertible Bonds Detachable Warrants
More informationHow To Invest In Stocks And Bonds
Review for Exam 1 Instructions: Please read carefully The exam will have 21 multiple choice questions and 5 work problems. Questions in the multiple choice section will be either concept or calculation
More informationModule 8: Current and long-term liabilities
Page 1 of 35 Module 8: Current and long-term liabilities Overview In previous modules, you learned how to account for assets. Assets are what a business uses or sells to earn revenues. Recall that the
More informationDEBT MANAGEMENT POLICY
THE CITY OF WINNIPEG DEBT MANAGEMENT POLICY I. INTRODUCTION A. Purpose The City recognizes that the foundation of any well-managed debt program is a comprehensive debt policy. This Debt Management Policy
More informationChapter 10. Fixed Income Markets. Fixed-Income Securities
Chapter 10 Fixed-Income Securities Bond: Tradable security that promises to make a pre-specified series of payments over time. Straight bond makes fixed coupon and principal payment. Bonds are traded mainly
More informationIntroduction to Bond Math Presentation to CDIAC
October 2, 2008 Peter Taylor, Managing Director, Public Finance Department Matthew Koch, Vice President, Public Finance Department Introduction to Bond Math Presentation to CDIAC Agenda Agenda I. What
More informationBonds and preferred stock. Basic definitions. Preferred(?) stock. Investing in fixed income securities
Bonds and preferred stock Investing in fixed income securities Basic definitions Stock: share of ownership Stockholders are the owners of the firm Two types of stock: preferred and common Preferred stock:
More information- Short term notes (bonds) Maturities of 1-4 years - Medium-term notes/bonds Maturities of 5-10 years - Long-term bonds Maturities of 10-30 years
Contents 1. What Is A Bond? 2. Who Issues Bonds? Government Bonds Corporate Bonds 3. Basic Terms of Bonds Maturity Types of Coupon (Fixed, Floating, Zero Coupon) Redemption Seniority Price Yield The Relation
More informationCopyright 2009 Pearson Education Canada
The consequence of failing to adjust the discount rate for the risk implicit in projects is that the firm will accept high-risk projects, which usually have higher IRR due to their high-risk nature, and
More informationAn Introduction to Institutions, Management, & Investments
An Introduction to Institutions, Management, & Investments TEMTH EBITIQM HERBERT B. MAYO The College of New Jersey *\ SOUTH-WESTERN t% CENGAGE Learning- Australia Brazil Japan Korea Mexico Singapore Spain
More informationCHAPTER 8 INTEREST RATES AND BOND VALUATION
CHAPTER 8 INTEREST RATES AND BOND VALUATION Answers to Concept Questions 1. No. As interest rates fluctuate, the value of a Treasury security will fluctuate. Long-term Treasury securities have substantial
More informationFinancial-Institutions Management. Solutions 6
Solutions 6 Chapter 25: Loan Sales 2. A bank has made a three-year $10 million loan that pays annual interest of 8 percent. The principal is due at the end of the third year. a. The bank is willing to
More informationBorrowing Money for Your Business
Borrowing Money for Your Business After you have developed a cash flow analysis and determined when your business will make profit, you may decide you need additional funding. Borrowing money is one of
More informationFINANCIAL MANAGEMENT
100 Arbor Drive, Suite 108 Christiansburg, VA 24073 Voice: 540-381-9333 FAX: 540-381-8319 www.becpas.com Providing Professional Business Advisory & Consulting Services Douglas L. Johnston, II djohnston@becpas.com
More informationEQUINIX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION (in thousands, except per share data) (unaudited)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - GAAP PRESENTATION (in thousands, except per share data) Recurring revenues $ 314,727 $ 282,117 $ 216,517 $ 834,080 $ 610,384 Non-recurring revenues 15,620
More informationBonds. Describe Bonds. Define Key Words. Created 2007 By Michael Worthington Elizabeth City State University
Bonds OBJECTIVES Describe bonds Define key words Explain why bond prices fluctuate Compute interest payments Calculate the price of bonds Created 2007 By Michael Worthington Elizabeth City State University
More informationTVM Applications Chapter
Chapter 6 Time of Money UPS, Walgreens, Costco, American Air, Dreamworks Intel (note 10 page 28) TVM Applications Accounting issue Chapter Notes receivable (long-term receivables) 7 Long-term assets 10
More informationCHAPTER 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 informationCHAPTER 7 Cash and Receivables
CHAPTER 7 Cash and Receivables 7-1 LECTURE OUTLINE Chapter 7, the first of six asset chapters, covers cash, accounts receivable, and notes receivable. Temporary investments (marketable securities) are
More informationSOCIETY OF ACTUARIES FINANCIAL MATHEMATICS. EXAM FM SAMPLE QUESTIONS Interest Theory
SOCIETY OF ACTUARIES EXAM FM FINANCIAL MATHEMATICS EXAM FM SAMPLE QUESTIONS Interest Theory This page indicates changes made to Study Note FM-09-05. January 14, 2014: Questions and solutions 58 60 were
More informationAmerican Options and Callable Bonds
American Options and Callable Bonds American Options Valuing an American Call on a Coupon Bond Valuing a Callable Bond Concepts and Buzzwords Interest Rate Sensitivity of a Callable Bond exercise policy
More informationSTATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS
C H A P T E R 1 0 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS I N T R O D U C T I O N Historically, profit-oriented businesses have used the accrual basis of accounting in which the income statement,
More informationAccounts payable Money which you owe to an individual or business for goods or services that have been received but not yet paid for.
A Account A record of a business transaction. A contract arrangement, written or unwritten, to purchase and take delivery with payment to be made later as arranged. Accounts payable Money which you owe
More informationAnswers to Concepts in Review
Answers to Concepts in Review 1. Bonds are appealing to investors because they provide a generous amount of current income and they can often generate large capital gains. These two sources of income together
More informationSTATUTORY BOARD SB-FRS 32 FINANCIAL REPORTING STANDARD. Financial Instruments: Presentation Illustrative Examples
STATUTORY BOARD SB-FRS 32 FINANCIAL REPORTING STANDARD Financial Instruments: Presentation Illustrative Examples CONTENTS Paragraphs ACCOUNTING FOR CONTRACTS ON EQUITY INSTRUMENTS OF AN ENTITY Example
More informationSTATUTORY BOARD FINANCIAL REPORTING STANDARD SB-FRS 32. Financial Instruments: Presentation Illustrative Examples
STATUTORY BOARD FINANCIAL REPORTING STANDARD SB-FRS 32 Financial Instruments: Presentation Illustrative Examples CONTENTS Paragraphs ACCOUNTING FOR CONTRACTS ON EQUITY INSTRUMENTS OF AN ENTITY Example
More informationShort-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.
Accounting Fundamentals Lesson 5 5.0 Receivables & Investments Short-term investments (also known as marketable securities) are easily convertible to cash that a company plans to hold for a year or less.
More informationAnalyzing the Statement of Cash Flows
Analyzing the Statement of Cash Flows Operating Activities NACM Upstate New York Credit Conference 2015 By Ron Sereika, CCE,CEW NACM 1 Objectives of this Educational Session u Show how the statement of
More informationEFFECTIVE-INTEREST METHOD
Chapter 14 Non-Current Liabilities 14 1 CHAPTER 14 NON-CURRENT LIABILITIES This IFRS Supplement provides expanded discussions of accounting guidance under International Financial Reporting Standards (IFRS)
More informationMITSUI 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 informationUse this section to learn more about business loans and specific financial products that might be right for your company.
Types of Financing Use this section to learn more about business loans and specific financial products that might be right for your company. Revolving Line Of Credit Revolving lines of credit are the most
More information3. If an individual investor buys or sells a currently owned stock through a broker, this is a primary market transaction.
Spring 2012 Finance 3130 Sample Exam 1A Questions for Review 1. The form of organization for a business is an important issue, as this decision has very significant effect on the income and wealth of the
More informationSummer 2002 Accounting 2110 Practice Exam 4. Student IDNO PLEASE ENTER YOUR NAME AND IDNO ON THE SCAN TRON SHEET!
Summer 2002 Accounting 2110 Practice Exam 4 Student IDNO PLEASE ENTER YOUR NAME AND IDNO ON THE SCAN TRON SHEET! 1. Which of the following most likely would be classified as a current liability? a. Dividends
More informationYou just paid $350,000 for a policy that will pay you and your heirs $12,000 a year forever. What rate of return are you earning on this policy?
1 You estimate that you will have $24,500 in student loans by the time you graduate. The interest rate is 6.5%. If you want to have this debt paid in full within five years, how much must you pay each
More informationAthens University of Economics and Business
Athens University of Economics and Business MSc in International Shipping, Finance and Management Corporate Finance George Leledakis An Overview of Corporate Financing Topics Covered Corporate Structure
More informationManagement 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 informationBond Valuation. FINANCE 350 Global Financial Management. Professor Alon Brav Fuqua School of Business Duke University. Bond Valuation: An Overview
Bond Valuation FINANCE 350 Global Financial Management Professor Alon Brav Fuqua School of Business Duke University 1 Bond Valuation: An Overview Bond Markets What are they? How big? How important? Valuation
More information2 The Mathematics. of Finance. Copyright Cengage Learning. All rights reserved.
2 The Mathematics of Finance Copyright Cengage Learning. All rights reserved. 2.3 Annuities, Loans, and Bonds Copyright Cengage Learning. All rights reserved. Annuities, Loans, and Bonds A typical defined-contribution
More informationScott s Real Estate Investment Trust. Interim Consolidated Financial Statements (Unaudited) March 31, 2009 and 2008
Interim Consolidated Financial Statements March 31, and Interim Consolidated Balance Sheets (in thousands of dollars) Assets March 31, December 31, Income-producing properties (note 3) 172,404 174,135
More informationCITY OF DES MOINES, IOWA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2013
CITY OF DES MOINES, IOWA BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2013 ASSETS DEBT TAX GENERAL SERVICE INCREMENT Cash and investments $ 13,823,153 $ 577,744 $ --- Taxes receivable 57,403,960 30,488,253
More informationBond Valuation. Capital Budgeting and Corporate Objectives
Bond Valuation Capital Budgeting and Corporate Objectives Professor Ron Kaniel Simon School of Business University of Rochester 1 Bond Valuation An Overview Introduction to bonds and bond markets» What
More informationValue of Equity and Per Share Value when there are options and warrants outstanding. Aswath Damodaran
Value of Equity and Per Share Value when there are options and warrants outstanding Aswath Damodaran 1 Equity Value and Per Share Value: A Test Assume that you have done an equity valuation of Microsoft.
More informationCHAPTER 20 LONG TERM FINANCE: SHARES, DEBENTURES AND TERM LOANS
CHAPTER 20 LONG TERM FINANCE: SHARES, DEBENTURES AND TERM LOANS Q.1 What is an ordinary share? How does it differ from a preference share and debenture? Explain its most important features. A.1 Ordinary
More informationSummary of Financial Report for the FY ending March 2015 (Non-Consolidated)
Summary of Financial Report for the FY ending March 2015 (Non-Consolidated) April 30, 2015 Listed Company Name: Japan Tissue Engineering Co., Ltd. Listed Securities Exchange: JQ Stock Code: 7774 URL http://www.jpte.co.jp
More informationChapter 12. Preferred Stocks - 1. Preferred Stocks and Convertibles
Preferred Stocks - 1 Chapter 12 Preferred Stocks and Convertibles Preferred Stocks Valuing and Investing in Preferreds Convertibles Valuing and Investing in Convertibles Preferred stocks have preference
More informationUnit 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 informationIpx!up!hfu!uif Dsfeju!zpv!Eftfswf
Ipx!up!hfu!uif Dsfeju!zpv!Eftfswf Credit is the lifeblood of South Louisiana business, especially for the smaller firm. It helps the small business owner get started, obtain equipment, build inventory,
More informationACCOUNT DEBIT CREDIT Accounts receivable 10,000 Sales 10,000 To record the sale of merchandise to Sophie Company
CURRENT RECEIVABLES Receivables are the amount owed to the organization by its customers and/or others. Current receivables will be collected within one year or the current operating cycle which ever is
More informationAccounts Payable are the total amounts your business owes its suppliers for goods and services purchased.
Accounts Payable are the total amounts your business owes its suppliers for goods and services purchased. Accounts Receivable are the total amounts customers owe your business for goods or services sold
More informationFinance 331 Corporate Financial Management Week 1 Week 3 Note: For formulas, a Texas Instruments BAII Plus calculator was used.
Chapter 1 Finance 331 What is finance? - Finance has to do with decisions about money and/or cash flows. These decisions have to do with money being raised or used. General parts of finance include: -
More information1Q 2014 Stockholder Supplement. May 7, 2014
1Q 2014 Stockholder Supplement May 7, 2014 Safe Harbor Notice This presentation, other written or oral communications and our public documents to which we refer contain or incorporate by reference certain
More informationTax rules for bond investors
Tax rules for bond investors Understand the treatment of different bonds Paying taxes is an inevitable part of investing for most bondholders, and understanding the tax rules, and procedures can be difficult
More informationCH 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 informationPaper F9. Financial Management. Friday 6 December 2013. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants
Fundamentals Level Skills Module Financial Management Friday 6 December 2013 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae
More informationSILVER CREEK ST. AUGUSTINE LLLP FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT. December 31, 2015 and 2014
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT TABLE OF CONTENTS INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS: BALANCE SHEET STATEMENT OF OPERATIONS STATEMENT OF PARTNERS' CAPITAL STATEMENT
More informationAmerican International Group, Inc.
Financial Supplement Fourth Quarter 2013 All financial information in this document is unaudited. This report should be read in conjunction with AIG s Annual Report on Form 10-K for the year ended December
More informationDRAFT. Quarterly Savings and Loan Holding Company Report FR 2320. General Instructions Who Must Report. When to Submit the Report
JOBNAME: No Job Name PAGE: 1 SESS: 378 OUTPUT: Mon Nov 21 10:08:25 2011 /frb/bsr/instructs/fr2320/4_dec11_2320-gen_v3 INSTRUCTIONS FOR PREPARATION OF Quarterly Savings and Loan Holding Company Report General
More informationCHAPTER 9 DEBT SECURITIES. by Lee M. Dunham, PhD, CFA, and Vijay Singal, PhD, CFA
CHAPTER 9 DEBT SECURITIES by Lee M. Dunham, PhD, CFA, and Vijay Singal, PhD, CFA LEARNING OUTCOMES After completing this chapter, you should be able to do the following: a Identify issuers of debt securities;
More informationCorporate Finance FIN 622
Corporate Finance FIN 622 Lesson 01 INTRODUCTION TO SUBJECT Corporate finance is the study of planning, evaluating and drawing decisions in the course of business. Let s take a simple example to determine
More information