AC 3100
Nominal Vs Effective Rates
Net
UsableNote Payable #1
Funds$100 face valueEffective
T=0 10% nominal
T=1 interest
Rate (IRR)
Repay face value plus 10% interest (on face value) in 1 year
NOTE PAYABLE #1
Loan proceeds
Repay face value
Interest (100*10
Source: Investopedia.com
What are 'Nonmonetary Assets'
Nonmonetary assets are assets a company holds for which it is not possible to p
fluctuate and that changes substantially over time; and assets that are not read
distinguished from monetary assets, whi
E6-3
MyBusinessCourse
Downstream in beginning inventory
Downstream in ending inventory
Intercompany sales
Invoice
$
6,250
$
6,625
$ 250,000
Markup
Profit
125% $ 1,250
125% $ 1,325
Recall this from AC 3100:
Dr
1,250
a I1 Investment in Sketchy
Cost of goods
Chapter 8
MULTIPLE CHOICE
1.
d
Fiscal 2016: ($1.25 - $1.28) x 100,000 = $3,000 gain on payable
Fiscal 2017: ($1.32 $1.25) x 100,000 = $7,000 loss on payable
2.
d
Fiscal 2016: ($1.31 - $1.30) x 100,000 = $1,000 gain on receivable
Fiscal 2017: ($1.28 - $1.3
E10-6
The information has been changed to assume:
Legal (Budgetary) basis budgetary comparison schedule
a Village of Owen
General Fund
General Ledger (GAAP Basis)
Fund Balance
Balance 1/1
1a
1b
2
3
4
5
6
Trial balance
b Close budgetary
b Close nominal
Cas
IMPORTS & EXPORTS
Direct rate
Indirect rate
US$
How many units of domestic currency (US$) are needed to acquire one unit of foreign currency (FCU)
How many units of the foreign currency (FCU) are needed to acquire one unit of the domestic currency (US$)
S
What is the balance in Mega's additional paid-in capital
account immediately after the business combination?
a. $12,500
b. $17,500
c.$155,000
d. $30,000
Explanation Choice "c" is correct. The transaction is
recorded at the fair market value of the stock i
AC 4050-6050
Intercompany Sale of Land
Sold at a gain
Proceeds of sale
Carrying amount of land on seller's books
Gain on sale
Working paper entries
Year 1
I1 Gain on sale
Land
Year 2
I1 Investment (if upstream RE, Jan 1)
Land
$ 1,000
800
$ 200
Dr
200
Cr
2
Hilton Worldwide
DuPont Analysis
Year
Year end
2015
12/31/2015
2014
12/31/2016
Net Operating Profit After Taxes & Net Nonoperating Expense
Earnings from continuing operations before income taxes
Gain on sale (Note 6)
Net operating profit before taxes
Inco
AC 4050
ADVANCED ACCOUNTING
FALL 2016
Instructor:
Time & Place
Contact Dr. V
Office Hours:
Dr. David Vicknair
Thursday 6:00-8:40 PM, Conway 103
Conway 312
Phone: 816-501-4089 (emergencies only: 913-787-4105)
Email:
[email protected]
Monday 11:0
A 70%-owned subsidiary company declares and pays a cash dividend. What effect does the dividend has on
retained earnings and non-controlling interest balances in the parents company consolidated balance sheet?
Answer: No effect on retained earnings and a
INTEREST RATE CONCEPT ERRORS
SPICELAND ET AL, 8TH EDITION
CASH DISCOUNTS-PAGE 368
Spiceland et al calculate the APR, but incorrectly refer to it as the AER. Assuming a 360-day year, the
correct AER on terms 2/10, net 30 is: (1+2%/(1-2%)^(360/30)-1=43.84%.
Argument
Rate
Nper
Pmt
PV
FV
Type
*
Explanation
Interest rate for the period
Total number of pmt payment periods in an annuity, or number of periods until FV is due
Annuity payment
Single amount due today
Single amount due Nper in the future
Timing of Pmt
AC 3100-Chapter 6 Lecture Notes
Simple Interest:
I=PRT where P=Principal, R=Periodic Rate, T=Periods
Future value: FVsimple=P+PRT or P*(1+RT)
Borrowing at simple interest can be deceiving. See: APR AER on a Simple Interest Loan.xlxs
Compound Interest (usi
AC
AC 3100
3100
HP
HP 10
10 bII
bII Versus
Versus Excel
Excel
Excel
HP 10bII
NPER
RATE
PV
PMT
FV
TYPE*
N
I/YR
PV
PMT
FV
BEG/END
* 0=END
1=BEG
Adjustment for P/YR:
Your calculator divides the value of I/YR by the value
of P/YR which is preset to 12. The de
TIME VALUE OF MONEY ALGORITHM
USED BY EXCEL & FINANCIAL CALCULATORS
This is the algorithm behind Excels basic time value of money functions (financial
calculators also), such as FV, PV, PMT and RATE (under RATE, Excel replaces rate
iteratively using Newto
AC 3100
Formulas for Time Value of Money Factors
Future value of a single cash flow:
FV n:r = (1+r)n
Present value of a single cash flow:
PV n:r = 1/(1+r)n
Future value of an ordinary annuity:
FVOA n:r = [(1+r)n-1]/r
Future value of annuity due:
FVAD n:r
AC 4050/6050
Exam 1 Study Guide
Fall 2016
The exam may include multiple choice (including Becker CPA from the Acquisition Method assignment, where there is
significant influence or control is 100%), short exercises, completion of a worksheet, and short di
During Year 1, Abaco Co., the 100% owned subsidiary of Walker lnc., sold merchandise to Walker at a 25%
markup over its cost. lntereonipany sales to Walker totaled $800,000 during Year 1. On December 31, Year 1,
Walker held $200,000 of the inventory purch