Formulas_FA_MA - Financial Accounting Formulas Chapter One...

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Financial Accounting Formulas Chapter One Formula Asset = Liabilities + Owner’s Equity Chapter Six Formulas Net sales = Sales – Sales returns and allowances – sales discounts Net Sales – Cost of Goods Sold = Gross Profit also called gross margin The cost of goods available for sale = Beg. inventory + cost of goods purchased Cost of goods purchased (also called Net Purchases)= purchases – purchase returns and allowances - purchase discounts + freight in The cost of goods sold = Cost of goods available for sale – ending inventory Gross profit percentage = Gross profit in $ divided by net sales in $ Gross profit in $ = Net sales – COGS Operating Expenses = Selling Expenses + General and Administrative Expenses Operating profit = Gross profit – operating expenses Income from Continuing Operations = Operating profit – Interest and other income, net In the absence of Income Tax Expense, Income from Continuing Operations is the same as Net Income Chapter Nine Formulas Interest = Principal x Rate x Time Maturity Value = Principal +( Principal x Rate x Time) Use the following steps to solve problems on discounted N/R. Step 1. Determine the Interest: I = P x Rate x Time 360 days 2. Determine the Maturity Value which is a formula below:
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MV = Principal + Interest 3. Determine the number of days left before the note matures. This is called the discount period 4. Determine the amount of discount, which is what the bank charges for exchanging the note for cash. Usually, the bank wants a higher interest rate (called discount rate) than what the note earns. Thus, discount does not mean that the owner of the note gets a discount or a saving, but that the owner gets less money that the maturity value of the note. The formula for the discount amount is: Discount amount = MV x Discount Rate x Discount Period 360 5. Determine the Proceeds = MV - Discount amount Okay, now let’s solve a problem by applying these steps: A 60-day, 12% note for $12,000,dated May 1, is received from a customer on account. If the note is discounted on May 21 at 15%, the proceeds are: I = 12,000 x . 12 x 60 360 I = $240 MV = 12,000 + 240 = $12,240 Discount period = 40 days Discount amount = 12,240 x . 15 x 40 360 Discount amount = $204 Proceeds = 12,240 - 204 = 12,036
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Chapter 14 Formulas Interest Paid on Bonds Payable = (Contract Rate x Par Value)/2 if semiannual Cash Received by the issuer = Interest Payment (Present Value of Annuity) + Total Par Value (Present Value of a $) Amortization of Premium or Discount on Bonds Payable = Total Premium or Discount/Total no. of periods Bonds Carrying Value = Total Par Value + Unamortized Premium or – Unamortized Discount Interest Expenses = Interest Payment + Amortized segment of discount on Bonds payable OR minus Amortized segment of premium on Bonds Payable Managerial Accounting Chapter 2 Formulas Prime Cost = Direct Material + Direct Labor Conversion Cost = Direct Labor + MOH Product Cost = Direct Material + Direct Labor + MOH
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Formulas_FA_MA - Financial Accounting Formulas Chapter One...

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