ACCT 201 1st EditionExam # 3 Study Guide Lectures: 26 - 33Lecture 26 (March 31)Pg. 409 and 410 -Interest acrualMay 1st company X receives a promissory note $1000, two-month note with 8% interest.May 1 Notes Receivable 1000Accounts Receivable 1000A = L + SE+1000 notes rec.-1000 acct. rec.Lecture 27 (April 2)1. Straight-line depreciation- Useful life  how long company will use asset- Salvage value what company can sell scrap for in futureWhat company paid Cost – Salvage# years useful life = depreciation per year OR divided by 12 for monthly2. Activity base OR use base- Calculate Standard rateCost – SalvageEstimated total usage = standard rate(ex: miles driven,machine hours run)- Standard Rate x actual use per time period = depreciation expense3. Double- declining- 2/estimated # of years useful life = rate- rate x current valueLecture 28 (April 4)Same as lecture 26, just did application of each methodPay attention to dates and know how to calculate depreciation of each methodDouble-declining 2 2# useful life 10 = .2 OR 20%Current value x rate 80,000Year 1 80,000 x .20 = 16,000/dep. year 1 -16,000Year 2 64,000 x .20 = 12,800/year 2 64,000Year 3 51,200 x .20 = 10,240/year 3 -12,800 51,200Beg. Year 3 useful life remaining was adj. to 5 years (not 8)Cost 80,000Accum. Dep. (12,000) After 2 years  6,000 x 268,000 current valueCost – Salvage 68,000 – 20,000 48,000# years useful life 5 = 5 = 9,600/yearLecture 29 (April 7)Amortization  all about intangibles- Uses straight-line methodA = L + SE-copyright -Amort. Exp.-patent-intangibleGross pay  full amount earned-After Social Security, Fed. tax, State tax, Medicaid, and Fica, you get your net payNet pay actual paycheckA = L + SE-Cash +Fed. Tax -(Gross pay)(Paycheck) +State Tax Salary/Wage exp.Lecture 30 (April 9)Balance SheetLiabilities- - Current liab.i) Acct. Payableii) Sal. Payableiii) Current portion of long term debtREMEMBER:Bonds-Stated rate = Market rate(What’s in the PAR (Similar risk/contract) (Face value) length comparison) <Discount(Sale) >Premium(Expense)Lecture 31 (April 11)Went over self-test questions on pg. 539 1, 2, 3, 6, 10  similar questions will be on the examA = L + SE-Cash +State Tax Payable -Salary or Wage Expense(Net- after +Fed Tax Payable (Gross-full amount earned)tax amount) +FICA+Salary Payable (Net)-or--Cash -Salary Payablenet. (net)Lecture 32 (April 14)PAR ValueA = L + SE-Cash +Common Stock-or-+Cash +Common Stock (PAR)+Additional Paid-in (Everything about PAR) Company sold 100 shares of common stock with $1 PAR for $5/ eachA = L + SE+500 Cash +100 Common Stock(100 x 5) +400 Add. Paid-in+Pref. Stock (PAR for pref.)+Add. Paid-inEntries for cash dividends1. Date of DeclarationA = L + SE+Div. Pay. -Dividend2. Date of Recordinternal documentation only (NO ACCT ENTRY)Summarizes who are all of the owners and how many shares do they own3. Date of PaymentA = L + SE-Cash -Div. Pay.Different types of Stock--Authorized  amount of stock that a company is authorized to sell-Issued  sold to the market (can’t become unissued)-Outstanding  only trait that can come and go, dividends are only paid to outstandingstocks-**Treasury Stock company buys back stock (retire)^^Contra equity accountLecture 33 (April 16)1. All of the following factors in computing depreciation are estimated excepta. costb. residual valuec. salvage valued. useful life2. A company purchased factory equipment on April 1, 2012 for $80,000. It is estimated that the equipment will have a $10,000 salvage value at the end of its 10-year useful life.Using the straight-line method of depreciation, the amount to be recorded as depreciation expense at December 31, 2012 isa. $8,000b. $7,000c. $5250d. $6000cost – salvage 80,000 – 10,000# years useful life 10 = 7,000/ year ÷ 12 = 583 x 9 (mo.)= 5,250 3. A factory machine was purchased for $125,000 on Jan. 1, 2012. It was estimated that it would have a $25,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would run 40,000 hours in the 5 years. The company ran themachine for 4,000 actual hours in 2012. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2012 would bea. $12,500 cost – salvage 125,000 – 25,000b. $20,000 total est. usage 40,000 = 2.5 hours x 4000 actual usec. $25,000 = 10,000 d. $10,000-Interest is always calculated be what’s in the contact (stated)-Par goes in common stock-Dividends have 3 important dates, but 2 accounting entries-Current means less than a year, or in a business cycle, whichever is longer-Be sure to look at