Measurement Period and Contingent Considerations

In this presentation, we will discuss measurement period and contingent considerations within an acquisition process, get ready to account with advanced financial accounting. At this point with the discussion of the acquisition process, you’re probably thinking, Okay, I kind of see how this fits together. I’ve see how this works. But logistically, it could still be a little bit tough. If you were to apply this in practice, you’re probably saying, Hey, there could be some problems. In practice. If we were to apply this out. For example, if we’re saying, okay, we’re going to revalue the assets and the liabilities. And we’re going to value the consideration we’re going to make a comparison of the value of the assets and liabilities to the consideration that’s being given for the company that in essence is being acquired in the acquisition process. Well, then what about that valuation process? That’s going to be difficult because how do we revalue the assets and liabilities because normally, when you value something, you value it from a market perspective, which means there’s actually a transaction a sale that’s taking place. So note obviously that valuation process is going to be somewhat of a tedious process for us to go through and revalue. And how long do we have for that to take? I mean, if this isn’t happening basically instantly with regards to this process, this is going to be taking some time.

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Statement of Cash Flow Tools For Completion

This presentation we will take a look at the tools needed in order to complete a statement of cash flows. to complete a statement of cash flows, we are typically going to need a comparative balance sheet that’s going to include a balance sheet from the prior period, whether that be the prior month or the prior year and a balance sheet from the current period, then we’re going to have to have an income statement. And then we’ll need some additional information in a book problem, it’ll typically give us some additional additional information often having to do with things like worth an equipment purchases, whether equipment purchases or equipment sales, were their investments in the company where their sales of stocks, what were the dividends within the company. In practice, of course, we would have to just know and recognize those types of areas where we might need more detail. And we would get that additional information with General Ledger we’d go into the general ledger, look at that added information. Now once we have this information, our major component we’re going to use is going to be the comparative balance sheet. That’s where we will start. So that comparative balance sheet is going to be used to make a worksheet such as this.

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Notes Payable Introduction

In this presentation, we will introduce the concept of notes payable as a way to finance a business. Most people are more familiar with notes payable than bonds payable, the note payable basically just being a loan from the bank. Typically, the bond payable is a little more confusing just because we don’t see it as often, especially as a financing option. From the business perspective, we often see it more as an investing or type of investment. But from a loan perspective, it’s very similar in that we’re going to receive money to finance the business if we were to issue a bond, or if we’re taking a loan from the bank. And then of course, we’re going to pay back that money. The difference between the note and the bond is that one the note is something we typically take from the bank. Whereas a bond is something we can issue to individuals so a bond we could have more options in terms of issuing the bonds than we do for a loan. Typically when we have a loan, we typically are Gonna have less resources, we can take a loan from the bank. When we pay back the bond, we often think of the bond as two separate things. And we set it up as two separate things, meaning we have the principal of the bond that we’re going to pay back at the end. And then we have the interest payments, which are kind of like the rent on the money that we’re getting, we’re getting this money, we’re gonna have to pay rent on it, just like we would pay rent if we had got the use of any physical thing.

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Bond Price Excel Formula

In this presentation, we will calculate the bond price explaining how this can be done using present value formulas within Excel. Remember that the bonds is going to be a great tool for both accounting and finance to describe the present value calculation. So that’s why it’s going to be used. Oftentimes It has two cash flows related to it, one’s going to be the face amount of the bond that’s going to be due at the end of the term of the bond. In our case, it’s going to be two years semiannual or four time periods. And the other is the flow of interest. So bonds are a great example because they have the two types of present value problems that we need in one area. So even if you’re not in an area where you’re dealing with bonds all the time, they’re still going to be used and useful to understand present value types of calculations. So here we’ve got the bond is going to have one cash flow of 100,000 at the end of four periods or two years, and we need to figure out what the present value is in order to price it back here at your at time period zero. And then we have these four payments in terms of the annuity 4000. And we need to take those and present value them, we could take each period and present value each payment and present value it. But the easier thing to do is to present value, an annuity when it’s applicable and present value, the one amount when it’s applicable. And therefore think of that about these as two basically separate cash flows that we’re going to have to present value separately. So we can do this multiple different ways. And it just depends on what you’re what tools you have. And where you are, in order to know how to do it. What you want to know is just that there’s different tools to do it. Anytime someone uses a different tool. What are they doing the same thing? And and when can you apply these tools and what’s actually happening here. So that’s what’s actually happening. We’re present valuing this information.

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Interest Calculations

In this presentation, we will take a look at how to calculate simple interest a few different ways. As we look at this, you may ask yourself, why are we going over this a few different ways, why not just go over it one way, the best way. And let us learn that well and be able to apply it in each situation. While one way does work in most situations. In other words, we will probably learn one way have a favorite way to calculate the simple interest and apply that in every circumstance. It’s also the case that when we look at other people’s calculations or technical calculation, they may have some different form of the calculation. For example, I prefer away when I think about the calculation of simple interest to have some subtotals in the calculation and have more of a vertical type of calculation the way we would see if done in something like a calculator. If we see a type of equation in a book, then the idea there is that Have the most simple type of equation expressed in as short a way as possible. And that typically is going to be some type of formula. And that formula will often not be showing the subtotal.

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Allowance Method % Accounts Receivable vs % Sales Method

In this presentation, we will be taking a look at the allowance method for accounts receivable focusing in on the calculation of the allowance for doubtful accounts. There are two methods that can be used in order to calculate the allowance for doubtful accounts accounts. One being the percentage of accounts receivable, the other is the percentage of sales, we will take a look at them both and look at the pros and cons of them. First, we’re going to look at the accounts receivable method. We’re going to start off with the percentage of accounts receivable method for a few different reasons. One, it’s the one that’s most often tested. And two is the one that may be most often used in practice often making the most sense to people that are looking at the two methods. It’s also a bit more complicated. So when we’re looking at test questions, they typically would focus on this method in order to have a bit more complicated process to do the calculation.

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Receivables Introduction

In this presentation we will take a look at receivables. The major two types of receivables and the ones we will be concentrating on here are accounts receivable and notes receivable. There are other types of receivables we may see on the financial statements or trial balance or Chart of Accounts, including receivables, such as rent receivable, and interest receivable. Anything that has a receivable, it basically means that someone owes us something in the future. We’re going to start off talking about accounts receivable that’s going to be the most common most familiar most used type of receivable and that means something someone, some person some company, some customer typically owes us money for a transaction happening in the past, typically some type of sales transaction. So if we record the sales transaction, that would typically be the way accounts receivable would start within the financial statements, meaning If we made a sale, we would credit the revenue account, we’ll call it sales. If we sell inventory, it would be called sales. If we sold something else, it might be called fees earned, or just revenue or just income, increasing income with a credit, and then the debit not going to cash. But going to accounts receivable.

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Internal Controls

 

In this presentation we will introduce the topic of internal controls. Internal Controls been policies within an organization in order to achieve certain objectives those objectives including the safeguarding of assets, having reliable accounting records, efficient operations, and company policy alignment. We’ll get further into what each of these categories mean in detail. However, first we want to discuss the fact that internal controls will change from organization to organization and industry to industry will have similar objectives between organization to organization industry to industry, however, the customization of the internal controls will differ in order to have an optimal amount depending on size of company and type of industry. For example, a small company often one run by one individual will have very much fewer internal controls for multiple reasons. One that that individual can really monitor A lot more of the transactions for a small company and have direct contact with the transactions that are taking place.

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Statement of Equity From Trial Balance 17

More in this presentation we will take a look at the statement of owner’s equity and see how to construct the statement of owner’s equity from the trial balance. When looking at the trial balance, we can see the accounts will be in order with the assets and then the liabilities, then the equity and then the revenue and expenses. The equity accounts being broken out here of owner capital and draws. But it’s a little deceiving to break out this equity section. Because the trial balance really is showing both a point in time the balance sheet account permanent accounts up top and timing accounts which are going to be the revenue accounts down below. When we think about the point in time for total equity as a whole. We’re really considering the entire blue area here. This is one of the most confusing concepts to really know when you’re looking at these financial statements.

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