Accounting Quick Reference

Working Capital

Office Equipment - A 400,000

Computer Software - A 40,000

Cash - A 440,000

Office Equipment - A 20,000

Computer Software - A 10,000

Cash - A 30,000

Inventory (Film-in-Progress/Finished Film) - A 50,500 = (38,000 + 12500)

Acc. Depreciation - XA 38,000 = (420,000-40,000)/10 years

Acc. Amortization - XA 12,500 = (50,000/4 years) no salvage

Accumulated Amortization - XA 25,000 = (2*12,500)

Impairment Loss on Computer Software - E 25,000 = plug

Computer Software - A 50,000 = Historical cost of software

Depreciation Expense - E 24,000 = (380,000-56,000)/12

Accumulated Depreciation - XA 24,000

DepreciaEon Expense - E 24,000 (for 2009)

Accumulated DepreciaEon - XA 24,000

Cash - A 260,000

Accumulated DepreciaEon - XA 124,000 = (2years*38)+(2years*24)

Loss on sale of Office Equip. - E 36,000 = plug

Office Equipment - A 420,000 = (Historical cost of equipment)

Nature of Resource

Tangible Intangible

Acquired

Internally Self-constructed Buildings and Equipment (asset)

Research and Development (expense, D = possibly asset in IFRS)

Advertising (expense)

Employee Training (expense)

Software Development Costs:

Pre-technological feasibility (expense)

Post-technological feasibility (asset)

Acquired

Externally Land, Buildings, and Equipment (asset) Patent (asset); goodwill (asset)

Proved Technologies (asset)

In-Process Technologies (asset)

Goodwill

* Company A acquires Company B for $100 million cash

* Company B's balance sheet:

Company A BV MV BV MV

Cash 5 5 Liabilities 20 25

Inventory 20 25 Common Stock 20 100

PP&E 40 45 Retained Earnings 25

Totals 65 75 65 125

Retirement of Assets

Journal entry:

Dr. Cash (cash received in sale, may be $0)

Dr. Accumulated Depreciation (full balance)

Dr. Loss (plug) OR Cr. Gain (plug)

Cr. Equipment (original cost)

Bonds

A two-year bond with annual coupon rate of 6% and yield of 10%

* Dec 31, 2007: Dr. Cash 931

Cr. Bonds Payable 931

* Dec 31, 2008: Dr. Interest Expense 93

Cr. Cash 60

Cr. Bonds Payable 33

* Dec 31, 2009: Dr. Interest Expense 96 (=931+33)*10%

Cr. Cash 60

Cr. Bonds Payable 36

Dr. Bonds Payable 1000 (=931+33+36)

Cr. Cash 1000

Trading Securities vs. AFS

Company ABC bought stock H on 11/1/2007 at $43,000. The market prices of the investment in stock H on 12/31/2007 and 12/31/2008