compare line items on a financial statement to each other, as a % what is horizontal analysis? looks at trends for one company over time (ex. what was the percentage change of COGS from 2014 – 2015?)

compare line items on a financial statement to each other, as a %

what is horizontal analysis?

looks at trends for one company over time (ex. what was the percentage change of COGS from 2014 – 2015?)

how do you calculate horizontal analysis?

new – old / old

journal entry for when a bond is issued at face value

cash 
bonds payable

how to calculate interest expense with bonds?

current carrying value x market rate

journal entry for an issuance of a discounted bond?

cash
discount 
bonds payable

journal entry for an interest payment on a discounted bond

interest expense 
discount 
cash

journal entry for interest payments on a premium bond

debit: interest expense and premium
credit: cash

what is the historical cost

original cost of asset + all costs needed to ready it for use

in calculating historical cost, what happens when you make additions/improvements or making repairs?

additions and improvements = add value to asset
repairs = expensed

journal entry to record depreciation expense

depreciation expense
accumulated depreciation

how to calculate the book value of an asset

cost of asset – accumulated depreciation

how to calculate a gain/loss on a sale

selling price – book value

comparing changes in net income for a company over time is an example of

horizontal analysis

how to analyze trend for horizontal analysis

current year amount – prior year amount / prior year amount

current ratio

 

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