Name of the entity Name of the entity Name of the entity

Balance sheet Income statement Statement of cash flows

At Dec 31, 2023 For the year ended Dec 31, 2020 For the year ended Dec 31, 2020
Unit of measure Unit of measure Unit of measure
Assets: Revenues Cash flows from operating activities
Total assets Expenses Cash flows from investing activities
Liabilities and stockholder’s equity: Income before income tax Cash flows from financing activities
Liabilities Income tax Net increase / decrease in cash
Total liabilities Net income Beginning cash flow balance
Stockholder’s equity Ending cash flow balance Recording bad debt expense estimates 1. Percentage of credit sales method
Common stock Bad debt expense (+E) Beginning balance + Bad debt expense
Retained earnings Allowance for doubtful accounts (-XA) – Write offs = Ending balance
Total liabilities and stockholder’s equity 2. Aging of accounts receivable
Name of the entity
Writing off specific uncollectible accounts Multiplication of percentage to each aged
Statement of stockholder’s equity
Allowance for doubtful accounts (-XA) accounts
For the year ended Dec 31, 2020
Accounts receivable (-A) Added on
Closing Entry Unit of measure
-> estimated ending balance
Revenue (debited) Common stock Retained earnings
Bad debt recoveries Balance in allowance for doubtful account
Expenses (credited) Last period’s ending balance
Accounts receivable (+A) before adjustment
Retained earnings (credited) Net income
Allowance for doubtful accounts (+XA) -> Beginning balance – Write offs
Dividends
Cash (+A) Bad debt expense
Ending balances on balance sheet
Accounts receivable (-A) -> Added on – Balance before adjustment
FIFO
Beginning balance + Purchases - Ending balance (last ones) Formula Sheet
= COGS Ending Common Stock = Beginning common stock + Stock Issuance
LIFO Ending Retained Earnings = Beginning retained earnings + Net income – Dividends
Beginning balance + Purchases – Ending balance (first ones) Common Stock = Number of shares x Par value per share
= COGS Additional Paid-In Capital = Number of shares X excess of market value over par value per share
Average Cost Earnings Per Share = Net income / Weighted average number of shares of common stock outstanding
∑(Number of units x units cost)/Number of units Current Ratio = Current assets / Current liabilities
Net Profit Margin = Net income / Net sales (Operating revenues)
Total Assets Turnover Ratio = Net sales / Average total assets
Depreciation expense method Average Total Assets = (Beginning balance + Ending balance) / 2
1. Straight-Line
Gross Profit Percentage = Gross profit / Net sales
(Cost – Residual Life) X 1/Useful Life
Gross Profit = Net sales – Cost of Sales
2. Units-of-Production
Operating Income = Gross profit – Operating expenses
(Cost – Residual Life) / Estimated total production Return on assets = Net income / Average total assets
x Actual production or activity level of the period Average total assets = (Beginning total assets + Ending total assets) / 2
3. Double-Declining
ROE = NI/S (profit margin) x S/A (assets turnover) x A/E (leverage)
(Cost – Accumulated depreciation) X 2/Useful Life
ROA = NI/A (profit margin x total assets turnover)
Interest Rate for 20 Days = Amount saved / Amount paid
Disposal of depreciable assets Annual Interest Rate = Interest rate for 20 days x 365/20days
1. Depreciation expense, Accumulated depreciation Receivables Turnover = Net sales / Average net trade accounts receivable
2. Cash (D), Accumulated depreciation (D), Asset (C),
Average Collection Period = 365 days / Receivables turnover ratio
Gain on asset (C) / Loss on sales (D)
Goods Available For Sale = Beginning inventory + Purchases
Depletion
COGS = Beginning inventory + Purchases – Ending Inventory
1. Inventory (D), Depletion cost (C) Average Cost = Cos of goods available for sale / Number of units available for sale
Inventory turnover = cost of goods sold / average inventory
Deferred revenue – Unearned revenue Average inventory = (beginning inventory + ending inventory ) / 2
Unearned revenue (D), ~ Revenue (C)
Average days to sell inventory = 365 / inventory turnover
Accrued revenue – Receivables
Fixed Asset Turnover = Net sales / Average net fixed assets
~ Receivable (D), ~ Revenue (C) Asset Intangibility Ratio = 1 – (Fixed assets / Total assets)
Deferred expense – Prepaid expense (if used) Net Book Value = Acquisition cost – Accumulated depreciation
~ Expenses (D), Prepaid expense (C) Impairment Loss = Net book value – Fair value
Accrued expense – Payables
Goodwill = Purchase price + net assets
~ Expense (D), ~ Payable (C)
Accounts Payable Turnover Ratio = COGS / Average accounts payable
Interest expense = Principal x Interest rate x time of month/12
Long-term Lease Formula Sheet
Lease asset, Lease liability Working Capital = Current assets – Current liabilities
Short-term Lease Present Value = Amount x 1/(1+i)^n
~ Expense, Cash Times Interest Earned = (Net income + Interest expense + Income tax expense) / Interest expense
Single payment -> PV at $1 Straight-Line Amortization = Discount or Premium / periods of bond life
Debt-to-Equity Ratio = Total liabilities / Total stockholder’s equity
Earnings Per Share = Net income / Weighted average number of common shares outstanding
*Net income should have preferred dividend deducted
Dividend Yield Ratio = Dividends per share / Market price per share
Capital Acquisitions Ratio = Cash flows from operating activities / Cash paid for plant, property, equip
Free Cash Flow = Cash flows from operating activities – Dividends – Capital expenditures

Bond (Cash payment per interest period)

➔ Principal x (Interest rate x annually/semi)
Bonds issued at discount
➔ Single principal payment at maturity = Principal x (market interest rate x annual’s annuity)
+ Annuity cash interest payments = Interest (coupon rate interest) x E2(market interest
rate)
= Issue price of bonds
Interest expense & Bond discount (at discount/premium)
Interest expense = bonds payable book value x market interest rate per period
Cash owed value = bond face value x coupon rate per period
Amortized amount (Bond discount (C)) = cash owed value – interest expense

Key Dividend Dates

1. Declaration date (retained earnings (-SE), Dividends payable (+L))
2. Date of record : (no journal entries)
3. Date of payment : (Dividends payable (-L), Cash (-A))

Indirect method
Gains -> subtracted from net income Losses -> added to net income

Liability with annuity -> PVA at $1