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Question

How are contributions in perpetuity classified in a NFP (including temporarily restricted earnings)

Answer 1

Net assets with donor restrictions

Answer 2

Level 1: Quoted prices in active markets for (identical ONLY) assets or liabilities that the entity can access on the measurement date. Level 2: observable, either directly or indirectly. This includes quoted prices for similar assets or liabilities in active markets, or quoted prices for identical assets in inactive markets. Level 3: Unobservable inputs based on the entity’s own assumptions about what market participants would use. These often involve estimates like projected cash flows or internally generated data and are the least reliable. Identifying specific market participants is not considered and assumption

Answer 3

Premiums on life insurance (non deductible) (Not amount paid) Proceeds from life insurance policies Interest income on municipal bonds Dividends (DRD) If ownership is less than 20%, the DRD is 50% of the dividends received. If ownership is 20% to 80%, the DRD is 65%. If ownership is over 80%, the DRD is 100% (full exclusion).

Answer 4

Accelerated depreciation for tax purposes Installment sales (rev recognized on books now but taxable income recognized later when cash is received) Unrealized gains on trading securities Rent receivable Prepaid expenses Deducted now for tax purposes and not on books If you are the one paying in advance Book income > taxable income I cant deduct it yet in my books

Answer 5

Warranty expense Recognize on the books now, tax return later NOL * tax rate Deferred compensation liability Expense in books now but deductible on tax return when paid Unrealized losses on trading securities Amortized startup cost on taxable income Net operating Carry forward losses (if not carried back its carried forward) Bad debt expense Expense recognized on the books now but tax deduction only when specific accounts are written off later Prepaid expenses if you receive cash in advance taxable income > book income I cant record this income in my books because its unearned like advance royalties

Answer 6

(adjust netincome) -AR ( NET) -Inventory -deferred income taxes ( temporary difference * tax rate for the year -GAIN on sale of equipment(different from proceeds on sale)(bc it comes from netincome) (price sold- CV) -Depreciation -Prepaid insurance -Trading securities(+)(-)they are current assets -Increase in tax liabilities -AP -Tax payable -Dividend received (already included in netincome) -Activities associated with agency transactions (NFP) - interest lease payments Gains = proceeds - BV If gains come from trading securities then they are not adjusted to net income since they are already part of operating

Answer 7

Dividends paid Transactions obtaining resources from owner and providing them with a return on their investment Proceeds from issuance of long term debt Cash contributions restricted by the donor for long-term purpose Payment on long term debt Proceeds from sale of treasury stock Proceeds from issuing your own debt Proceeds/payment of Line of credit Long term debt - current portion

Answer 8

-Available for sale securities -Down payment -Sale of building -Transactions involving making and collecting loans -Purchase of bonds payable -PROCEEDS from buying or selling someone else debt -Purchase of common stock - changes in Fixed assets -capital expenditures -capital lease payments -collections from notes receivables

Answer 9

Ownership transfer to lessee Written purchase option reasonably certain to exercise NPV of lease payments plus any guarantee residual usually 90% or more of the assets FV Economic life lease term covers typically 75% or more of the assets economic life Specialized asset meaning it has no alternative use to the lessor at the end of the lease Operating

Answer 10

Record estimated warranty expense Dr warranty expense Cr warranty liability Actual warranty cost incurred Dr warranty liability Cr cash or payable

Answer 11

Yes, reclassification is an exception and requires disclosure. it can exclude that liability from current liabilities and classify it as long-term. Its must have intent and ability(before issuance of balance sheet) This is an exception to the general rule that subsequent events after the balance sheet date are only disclosed and not adjusted. It does not have to directly refinance the note (like issuing bonds and using the proceeds to pay debt) Dr current liabilities Cr long term liabilities

Answer 12

Difference between total payment lump sum - PV of annual payment

Answer 13

Evaluation period ends when financials are issued No discloser required for evaluation date

Answer 14

Evaluation period ends when financials are available to be issued And evaluation process should be disclosed to which subsequent events were evaluated

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