Review Sheet for ACCT 3120 Comprehensive Final
Chapter 9
• Acquisition of PP&E – what goes into the cost of the asset, what does not; how to
handle lump-sum purchases of PP&E
• Nonmonetary exchanges (similar and dissimilar assets) – what is the journal
entry, what is the value of the equipment received, what is the gain/loss, if any,
recognized.
• Self-Constructed Assets – how are weighted average accumulated expenditures
calculated; given weighted average accumulated expenditures, what is the interest
capitalized
• You can skip costs subsequent to acquisition (additions, betterments, etc) and
disposals of assets.
Chapter 10
• Calculate depreciation (double-declining balance and straight- line – skip sum-ofyears digits)
• Skip section on Additional Depreciation Methods (group, composite, etc)
• Impairments – understand when a loss is recorded and how to value the loss (e.g.,
compute the dollar amount of the impairment loss, if any)
• Skip depletion
• Skip section on differences between tax depreciation and GAAP depreciation.
Chapter 11:
• Understand how to account for intangibles – what gets capitalized and what gets
expensed; do we amortize the intangible or not, etc. Remember, there is a new
standard here that we discussed in class so make sure to refer to class notes and to
the new chapter that can be downloaded from the Nikolai- Bazley website.
• Consistent with the above point, I can ask questions about all types of intangibles
(e.g., patents, trademarks, franchises, copyrights, organization costs, computer
software costs)
• Understand the accounting for goodwill – you will not have to calculate goodwill
(appendix) but you should understand the 2-step impairment test.
Chapter 12
• Skip the material on classification of liabilities – current vs. noncurrent.
• Skip sales taxes, payroll obligations, bonuses, property taxes
• Warranties, Premiums, Contingencies – know this
Chapter 15
• Skip the material on corporations (corporate form, legal capital, etc)
• Issuance of stock for cash, on a subscription basis, for nonmonetary items
(equipme nt)
• Compensatory stock option plans – fair value and intrinsic value methods; what is
recognized as compensation expense under each method, what journal entries are
•
•
•
•
•
required. Focus on fixed plans, not the variable plans (Remember: variable plans
are similar to SARs)
SARs – account for these, journal entries, etc.
Preferred stock – calculate dividends allocated between common and preferred
stock given various characteristics of preferred stock (cumulative, participating)
Convertible preferred stock and preferred stock with warrants – account for these,
know the journal entries, accounts effected, and for the case of preferred stock
with warrants know how to allocate between the preferred stock and the warrants.
Skip callable preferred stock, redeemable preferred stock
Treasury Stock – know both the cost and par value methods, journal entries and
computations for each.
Chapter 16
• EPS – calculate basic EPS; understand the calculation of the denominator
(weighted average shares outstanding); understand the effect of splits, dividends,
etc on the denominator calculation
• Diluted EPS – understand what this is (e.g., what is a potentially dilutive
security); understand how to rank the potentially dilutive securities and how to
determine the order of entry (if the y enter at all) into the EPS calculation
• Dividends – cash dividends, property dividends, scrip dividends and stock
dividends (large and small) are all fair game.
• Skip the material on prior period adjustments, appropriations of retained earnings,
statement of retained earnings, and statement of stockholder’s equity.
Chapter 19
• Calculate pension expense – know the six components and make the journal
entries required
• Calculate the additional pension liability and any journal entries required
• I will not ask about defined contribution plans – only defined benefit plans
• Skip curtailments and settlements of pension plans, termination benefits, multiemployer plans.
• OPEBS – calculate OPEB expense, make the appropriate journal entries;
understand how this differs from pensions
Chapter 22:
• Accounting changes – what is a change in accounting principle; what is the
general rule of how to account for these; what are the exceptions to this rule and
how do you account for exceptions
• Changes in estimate – how do we account for these and actually do the
calculations