Ch 9
If a bond that has a $100,000 face value sells for $115,000, this means the bonds sold at:
A premium
These are apart of the stockholder's equity section of the balance sheet?
Additional paid in capital (APIC), Treasury Stock, Common Stock, Preferred Stock, Retained Earnings,
This is a section of the statement of cash flows starts with Net Income.
What is Operating Activities?
Using vertical analysis, balance sheet accounts are expressed as a percentage of
What is total assets?
What type of account is unearned revenue?
Liability
What is the financial statement impact of a company borrowing money and signing a notes payable?
Increase in assets, increase in liabilities
They generally receive dividends after preferred stockholders
What are common stockholder's?
These are reported on the investing section of the statement of cash flows?
What is long term assets and investments?
Comparing the change in financial statement data over multiple years is an
example of
Horizontal analysis
When is unearned revenue created?
When a customer pays for a good or service in advance
What will happen to the carrying value of a bond if it was sold at a discount?
The carrying value will increase over time to equal the face value at maturity
Issued stock is broken into which two categories
Outstanding stock and treasury stock
These are the steps to calculating net operating cash flows:
1. Net Income
2. Add back depreciation (and other non cash expenses)
3. Subtract Gains Add Losses
4. Adjust for changes in current assets (CA).
- Add Decreases in CA
- Subtract Increases in CA
5. Adjust for changes in current liabilities (CL)
- Add increases in CL
- Subtract decreases in CL
Expresses each item in a financial statement as a percentage of a
base amount from the same period
vertical analysis
What is the financial statement impact of purchasing inventory on account?
Increase in assets and increase in liabilities
This equation calculates interest payment (cash paid) column for a bond payable.
What is: Face value of the bond * the stated interest rate * x/12
What would be the impact of issuing 100 shares $1 par value common stock for $7?
Increase to common stock of $100, increase to APIC of $600
Calculate the net financing cash flows for a company that issued common stock for $5,000 and paid $8,000 in dividends.
($3,000)
Calculate the percent change for cash between 2022 and 2023. In 2023 the cash value was $200,000 and in 2024 the cash value was $350,000.
75% increase
Which Time Value of Money (TVM) table would you use if you wanted to know how much you need to invest today to have $5,000 in 5 years?
Present Value of $1
A company signs a $100,000, 6%, 7 month note payable on August 1, 2024. The amount due plus interest is due at maturity. What is the dollar value of the
adjustment to record accrued interest on December 31, 2024?
$2,500
A company has a beginning balance in their retained earnings of $7 million. They have net income of $3.5 million and an ending balance in their retained earnings of $9.5 million. What was the value of the dividends paid?
$1 mil
f the total change in cash equals $61,000, net operating cash flows equals $25,000 and net financing cash flows equals ($20,000). What is the value of the net investing cash flows?
$56,000
analyze within one year, moving up and down vertically within one column
A company bought equipment for $50,000. In addition they paid $2,500 for shipping, $1,000 for installation, and $600 for sales tax. Calculate the total capitalized cost for the equipment.
$54,100