48% of their revenue in 2012 was from the iPhone.
They’re thinking about putting out a low-cost iPhone (have to consider manufacturing and profit)
10 t/f, 15 multiple choice (8-10) – terminology goes well with t/f and multiple choice
Analysis question including calculations
Accounting cycle/adjusting entries
Bring a pencil, calculator and accounting paper
Current liabilities: accounts payable, 90 day notes payable, taxes payable
Current liabilities: unearned revenue, current portion of long-term debt, interest payable
Current asset: interest receivable
100,000 loan – 25,000 due in 2011, 75,000 due in 2013
Current liability: 25,000
Long-term liability: 75,000
Long term liability: 20 year bonds not accounts payable
Bonds of 25 million, taking 25 years to mature – coupon rate 4.25% and market of 3.95%
Market prices goes up if the interest rate goes down (you won’t find interest like that in the market
place, so people will pay more for it)
Bonds of 10 million, maturing in 2026 – coupon rate 2.75% - Can they deduct $275,000 of interest
expense if the bonds are outstanding?
Yes they can.
Lease a food cart for 6 months and then returned it. Lease payment was $650 a month, with a purchase
price of 10,000
This should not be recorded as a capital lease, but an operating lease (because you’re not using 75% or
more of the thing’s life/price)
In the previous question, you are the lessee
Companies prefer operating leases because they don’t impact the debt/equity ratio The equity part of the debt-to-equity ratio includes common shares and retained earnings
Bond terms: face value, callable, junk (if a bond is issued by a company and it is given a low rating, it is
$600,000 for a boat which is good for 20 years, residual value of $40,000. Annual depreciation
Same as before but declining balance at 20%
Debit depreciation expense and credit accumulated depreciation to record depreciation expense
Depreciation never involves cash because it is an adjusting entry
Goodwill cannot be recorded based on financial success and Oscar nominations
Goodwill comes from buying another company
Policy is to get cars tuned up every month. This should not be capitalised.
This is routine maintenance but it is not seriously extending the useful life
Accumulated depreciation and allowance for doubtful accounts are contra accounts.
Contra accounts are recorded on the opposite side that they usually are (i.e. assets are usually debits, but
a contra asset is credit)
Hudson Bay Company sold Zellers lease locations to Target, but not the brand. Also Wal-Mart got some
leases too. Sloppy seconds, they wanted
But yea, I can se