Time Value of Money
100
The name for a stream of equal payments at equal intervals and payable at the beginning of the period.
ANNUITY DUE
200
PV of $1000 received 5 years from now when I=10%.
$621
300
FV of $1000 in 10 years with a rate of 8%, compounding semi-annually
$2,191
400
The present value of $100,000 received 10 years from now when the annual interest rate is 12% and
interest compounds quarterly.
30,660 (40 PERIODS, I=3%)
500
PV of a $1000 ordinary annuity for 10 years w/ a 10% discount rate.
$6,145
Income Statement
100
Travel and entertainment expense generally shows up here in a multi-step income statement
Selling expenses (Under operating expenses)
200
The controller’s salary would normally show up in here in a multi-step income statement
Administrative expenses(Under operating expenses)
300
This type of income statement shows Gross Profit
What is multi-step?
400
The planned timing of revenues expenses gains and losses to smooth out bumps in earnings
Earnings Management
500
Restructuring charges, if material, would show up this way in the income statement
As a separate line item in Operating Section
Ch 4 Potpourri
100
(Net income minus preferred dividends)/ weighted average common shares outstanding
Earnings Per Share
200
This type of change would be handled prospectively
What are changes in estimate
300
Includes all changes in equity during a period except those resulting from investments by or distributions to owners.
Comprehensive income
400
Two options for presenting comprehensive income
In a separate income statement and in a combined statement of income and comprehensive income
500
Two examples of other comprehensive income
Gains and losses on foreign currency translations
Unrealized holding gains/losses
Stmt of Cash Flows
100
Purchase of equipment impacts this SCF section
Investing
200
Paying dividends impacts this SCF section
Financing
300
Selling a truck for a gain impacts these SCF sections when the Indirect Method is used.
Investing, Operating
400
Issuing bonds in exchange for plant equipment would impact these SCF sections
None
500
Operating cash flows if Net income is 100,000, AR increased by 20,000, AP increased by 10,000, and depreciation
was 15,000
$105,000
FINAL JEOPARDY
A Voluntary Change in Accounting Principle (eg. from FIFO to Average Cost) would be accounted for this way
What is recast prior years and record a net of tax adjustment to the earliest year presented’s beginning retained
earnings balance