TheAccountingDr.com: 2020

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Statement of Cash Flows - PPE, net versus PPE + Accumulated Depreciation Account

In this financial accounting video, the differences in presentation of Property, Plant and Equipment, net versus Property, Plant and Equipment and an Accumulated Depreciation account are explained when presented differently on the Balance Sheet. In addition, the solution to a statement of cash flows derived from a complete Balance Sheet and Income statement is presented.

Statement of Cash Flows - PPE, net versus PPE + Accumulated Depreciation Account
https://youtu.be/Sru9l6jjb8c

Statement of Cash Flows - Calculation of Dividends and Purchase using Equipment, net Account

In this financial accounting video, an entire statement of cash flows is demonstrated using an income statement and a balance sheet. In addition, the calculation of dividends is shown (when not provided the statement of retained earnings) and the borrowing and paying off of notes payable as well as the calculation of purchases using an equipment, net account.

https://youtu.be/H2bBML0RXmY

Calculating Unknown Amounts for Use in the Statement of Cash Flows

In this financial accounting video, the calculation of unknown amounts for use on the statement of cash flows is demonstrated. Specifically, how to calculate dividends from retained earnings information from the income statement and balance sheet as well as cash received from the sale of a plant asset when given a gain amount plus plant assets, net amounts. https://youtu.be/ajaLbwd_Ppc

The Statement of Cash Flows w/Interpretation

In this financial accounting video, a simple example of the operating activities section of the statement of cash flows is demonstrated, using the indirect method. In addition, a full statement of cash flows is demonstrated as well as the interpretation of the results of a statement of cash flows.

https://youtu.be/Dukvt5glA_A

The Statement of Cash Flows - Introduction

In this financial accounting video, the three main sections of the statement of cash flows are discussed with a detailed explanation of the operating activities section under the indirect method (i.e. Gains and Losses, Depreciation, Current Assets and Current Liabilities). In addition, multiple accounts are discussed and why and where in the statement of cash flows and in what section these items appear, is discussed.

https://youtu.be/-r7YuduFqjc

Incremental Analysis of Dropping a Product Line

In this managerial accounting video, an Incremental analysis of dropping a product line is demonstrated by using an example problem. Results confirmed using Contribution Margin Income Statements.

https://youtu.be/xgg0kemIWRk

Budgeted Balance Sheet

In this managerial accounting video, a budgeted balance sheet is demonstrated with an example.

http://www.youtube.com/watch?v=zC-eVzc5hx8

Budgeted Income Statement

In this managerial accounting video, using t-accounts to compute cost of goods sold, a budget income statement over tow months is demonstrated.

http://www.youtube.com/watch?v=GJBYc45LhY4

Partial Year Depreciation

In this video, partial year depreciation is discussed using a simple example (straight-line depreciation). The first partial year and the last partial year are calculated.

http://www.youtube.com/watch?v=VU31hfUc7FM

Double-Declining Balance Method

In this video, the double-declining balance method of depreciation is discussed along with an example. In addition, the method of switching from double-declining balance to the straight-line method of depreciation in the next to last year of an assets useful life is discussed and an example provided.

http://www.youtube.com/watch?v=LTFwJ6Ampcw

Absorption Costing versus Variable Costing

In this video, the difference between Absorption Costing and Variable Costing are described. In addition, an example of a Gross Profit Income Statement (Absorption Costing) and a Contribution Margin Income Statement (Variable Costing) is demonstrated.

The Classified Balance Sheet

In this video, I discuss what a classified balance sheet is and how to create one. In addition, I discuss two liquidity ratios: the Current Ratio and the Debt Ratio.

The Classified Balance Sheet and Liquidity Ratios (Current Ratio & Debt Ratio)

https://youtu.be/7U1a94hF4LE

The Closing Process

In this video, the closing process is explained and why it is needed. Examples are used to show the journalizing and posting of closing entries. https://youtu.be/AvQb1QgtoW4

Adjusting Entries, the Worksheet and the Financial Statements

In this video, we continue to review adjusting entries (journalizing and posting) and moving that information to the worksheet and then producing financial statements; specifically, the income statement, the statement of retained earnings and the balance sheet. There is a short discussion on how the financial statements are "linked" together. https://youtu.be/ESdeYMoA8Vk

Adjusting Entry Examples

https://youtu.be/o7oomc3INjE

Accrual Accounting and Adjusting Entries

I recently uploaded a new video lecture on Accrual Accounting versus the Cash-Basis of Accounting. In addition, the video explains the five adjusting entry types and examples of each. Check it out!

There’s always FREE cheese in a mouse trap!

STOP BEFORE YOU BLOW THAT STIMULUS CHECK & READ THIS PLEASE!!!! JUST A BIT OF HELP!!

Repost from the Dave Ramsey financial group

“GOVERNMENT STIMULUS CHECK INFORMATION

BE WISE MY FRIENDS...
BE WISE.......

So here’s what’s up:

1. To Tenants: If the government says you don’t have to pay your rent and there’s a ban on evictions, you better do whatever you can to pay your rent. There will be major repercussions when eviction bans are lifted. Don’t think you’ll get a free ride out of this.
PAY YOUR RENT! Your landlord has bills to pay too.

2. To Homeowners: If the government tells banks to stop mortgage payments, DO WHATEVER YOU CAN TO PAY YOUR MORTGAGE!. Some lenders are saying you don’t have to pay for 3 months, but on the 4th month, all four payments are due in full. Do not take a chance and not pay. Major foreclosures will come from all this. The banks didn’t help homeowners in 2008-2009 and in 2020, it’s still the same.

Pay your mortgage.

3. If the utility company suspends payments, you better pay any amount you can! They are like banks, they will want their money eventually and when all this clears up, you’ll owe an exorbitant bill and still won’t have any utilities. Pay whatever you can.

4. If you get a government stimulus check, this check is to help pay your bills. That means you pay your rent, your mortgage, your utilities, your insurance, your car payment, your bills.
This is not for frivolous spending.

5. The real problem is, many who will get the stimulus check....won’t pay their bills then will be crying and wailing saying
“They evicted me. They cut off my power, they repossessed my car...”
All while you’re broke and carrying that empty purse you bought with your stimulus check.

PAY YOUR BILLS!!!!

There’s always FREE cheese 🧀 in a mouse 🐁 trap!

How to Pay off Credit-Card Debt

Tackling Your Debt Wisely

Make more than the minimum payment. Credit card companies love it when you pay just enough to get by every month. At that rate, you’re mostly paying off interest and barely scratching the surface of your actual debt. Look at your most recent credit card statements to get a ballpark figure on what your monthly interest is, then budget as much of a payment as you can over that amount to actually see a difference in your statement.^[1]^[2]^[3]

If you want to know how much above the minimum you should pay, remember what interest is. Interest is the price you pay for money, and creditors always want you to pay interest before anything else. So making the minimum payment is usually only enough to keep your interest from compounding your debt into the stratosphere—to keep it where it is, in other words. You want to try to pay enough each month to get beyond the interest and into the principal.

Pay off debt with the highest interest rate first. It goes almost without saying, but it's something that a lot of people forget. If one credit line is charging you 11% Annual Percentage Rate, or APR (interest over the course of a year) while another credit line is charging you 9% APR, focus all your attention on the debt that falls under 11% interest rate. Pay it off before even touching the other debt. Sure, the other one will accumulate interest in the meantime, but since you’re paying interest either way, you might as well do it at the lower percentage.^[4]

If this process seems too hard, try snowballing your debt. If your interest rates are all roughly the same or you’re simply overwhelmed by the sheer number of payments you have to make each month, make the minimum payments on all but the lowest balance––which you should attack aggressively so that it disappears quickly. Once it’s gone, add the payments you would have paid on the lowest debt to the minimum payment on your next-lowest debt until it, too, disappears. Repeat until all debts are cleared. The sense of satisfaction you will feel in making fewer and fewer payments each month will make the process more bearable and help you achieve your goal.^[5]^[6]^[7]

Talk to your credit card companies. Explain your financial situation and ask if there is anything they can do to help. Many will lower your interest rate for a period of time and/or waive current late fee balances to give you an opportunity to catch up.^[8]

If you've been a customer of theirs for a long time, mention that. While some credit card companies don't care about customer loyalty, more than a few do. Those that do sometimes go to great lengths to keep their customer base happy and loyal, whatever the circumstances.

If at first you don't succeed, ask someone more important. If you can't make any headway with the first persons you speak with, ask to speak to a supervisor. If that doesn't work, ask to speak to the retention department. If that doesn't work, call back in a week or two.^[9]

Come prepared. Be sure to compile a list of other offers you recieve. Know your interest rate terms. Check out the rates that competitors are offering.

Never close cards with existing balances. It might seem like an easy way to get a handle on your debt, but it'll do horrors to your credit score, and you'll still be on the hook for the debt.^[10] All this will do is send your credit utilization (your available limit v. your current debt) down, further driving down your credit score. Learn more here on how to increase your credit score.

If you feel like you must close an account, you need to pay it off extremely quickly, and you need to make sure that the company records that it was closed at your request and not theirs. Make this request in writing.^[11]^[12]

Move your debts around. Let's be clear, transferring money from a credit card with 12% interest to a card with 0% interest may damage your short-term credit. However, barely chipping away at your debt because your interest is too high will damage your finances in the long-term. Shop around for long-term, low- or no-percent interest rate transfer opportunities, or look into transferring some of your debt onto a low-interest card that you already have. Keep the following in mind:^[13]

How long the low interest rate will last. Depending on your total debt and how quickly you think you can pay it off, 0% interest for six months may not be as good a deal as 2% for 18 months.

The amount of the transfer fee. When transferring, you usually have to pay a certain percentage of your debt up-front. Make sure that a) you can afford this transfer fee and b) the fee is less than you would have paid in interest during the introductory period. Usually, transferring to a low-interest card will involve less fees than transferring to a no-interest card. Weigh how much time you expect it will take to make a dent in your debt when choosing to transfer.^[14]

What the interest rate will be after the introductory period ends. Will it jump up to 18% after 12 months? If it does, will you have paid off enough debt by that time to make that jump worth your while?

How long you will be required to keep your balance with the company. Since credit-card hopping has become a popular way to avoid paying interest, some companies have begun stipulating that if you transfer your debt to another card before a certain amount of time has passed, the normal interest rate will be applied to all your previous balances retroactively, leaving you with a huge new debt.^[15]

Make sure to read all the fine print! Credit card companies are nothing if not resourceful in finding ways to take your money. Look for all the catches above and more, such as transfer fees and ballooning interest rates, before making any decisions.^[16]

See what you can liquidate to lower your debt. No one likes doing it, but sometimes it needs to be done. If you just bought a car, a memory foam mattress, or a new jacuzzi, think seriously about whether you really need these items, especially if you're paying for them on installment. Liquidating your big-ticket items now will mean less financial hardship for you later on.

Always try to find the sales venue that will get you the highest resale value. Think eBay and jewelers, not pawn shops.

Get creative and do the math. For example, if you have a car payment, if you can sell your car (even for less than the note is worth) for enough to pay off a card balance or three with higher interest rates and perhaps pay off the interest on the car note, then it makes financial sense to do that.

Budgeting Your Money Like a Pro

Track your spending. It’s one thing to make mental notes of things you’ve bought over the month, but it’s another thing altogether to see them add up on paper. This is especially true if you use a credit or debit card (people tend to spend more freely if they pay with plastic) or pay for things using multiple accounts (and therefore never really see the net total). Manually tracking your expenses will not only help you make better decisions, but also identify areas in which you don’t even realize you’re overspending.^[17]^[18]
Develop a budget for yourself. It isn’t enough to just throw a random payment at your credit card(s) every month. Instead, create a strategy, put it in writing, and budget your other expenses around your credit card payments. Here are some popular ways to save money and reduce your debts:

Think seriously about starting to save pocket money. It sounds childish, but the savings are anything but.

See if you qualify for food assistance. It's not glamorous, but neither is being broke.^[19]^[20]

Reduce your expenses by cutting costs in different areas of your life, such as spending less on entertainment or making sure your car is running efficiently so you spend less on gas.

Spend your tax refund wisely. For a lot of people, a tax refund is a windfall at the beginning of the year. If you anticipate getting a tax refund this year, resolve to set a sizable chunk of it aside in order to pay off some of your debt.

Sacrifice a small luxury (or three). For example, don’t buy that coffee on the way to work every day; make one at home for a fraction of the cost. Don't buy your books, DVDs, or CDs; just borrow them from your local library. Don't buy lunches for work; just make them at your home. (Pressed for time? Even something as simple as a sandwich or a salad with a hard-boiled egg makes a great lunch. Prep it the night before if necessary.)

When you’re stressed, treating yourself to the little things can feel like a necessity, and to a certain extent, it is. However, there are much cheaper ways of going about this. Instead of waiting in line for an overpriced mocha, bring a thermos of tea to the park and watch the autumn leaves fall. Instead of going out to dinner with your friends next Friday night, invite them to a potluck at your place. There are plenty of creative ways to cut back without feeling like a Spartan.

Build an emergency cash fund. Credit cards are often our go-to resource for unplanned expenses (the alternator dies, you get sick and miss work, etc.), but this can undo months of payments and completely demoralize you. A better idea is to tuck some money aside strictly for emergencies.^[21]^[22]^[23]

This doesn’t have to be a drain on your income. Remember those expenses you are cutting back on? Instead of simply not spending, try actually setting aside the money you would have paid on one or two of those expenses (for example, bar money every Friday night, manicure money every-other Sunday, etc.). Create a (free) savings account, put it in a CD, or even hide it in a cookie jar.

Remember that this fund is for emergencies only. Break your leg? Go ahead and dip in. Want to upgrade your phone? Find the money somewhere else.

Don’t relax your spending habits because you've successfully paid off some debt. Once you start to see that credit card balance go down, you may be tempted to treat yourself to a series of restaurant outings or a shiny new smartphone. Don’t do it; a few casual purchases can put you right back where you started, especially if something unexpected happens. Keep the end goal at the forefront of your mind––rewards that cost little or nothing are much better, like seeing a movie at a friend's house or making your favorite rich chocolate dessert and eating it all!

Keep the goal in mind. Remember what you're trying to do—get out of credit card debt. Just like smokers almost never quit by cutting back, you probably won't get out of debt if you keep adding to it by using your cards all the time. You want to try to minimize your use of cards or stop using your cards altogether.

Freeze them in a block of ice if you need to. Freezing a sealed bag of water with the cards inside is a fun and mess-free way of doing this. That way, your card will be there if you need it, but you'll have to wait for the ice to thaw, giving you hours to decide whether you really need it.

Get a lock box. Put your cards in a lock box and put the lock box somewhere out of the way. Either give the key to someone else or put the key at another location, like your desk drawer at work, so that when you need to use the credit card, you will have to think long and hard about doing it.

As a last resort, take your cards and cut them in to pieces with scissors to make sure you won't use them again.

TIPS

Use a debt calculator to help you pay off your credit and to keep track of your budget.
Consider seeing a credit counselor. A credit counselor can analyze your finances and help you come up with a workable budget and debt repayment plan.
When making any purchase stop and ask yourself these key questions: "Do I really need to buy this?" and "Is there any way I can do this cheaper?" It's worth keeping these points in mind at all time when looking to purchase things; the few coins or dollars you save can make a huge difference.

WARNINGS

Beware of debt consolidation companies and credit counseling companies who do not provide any service other than debt consolidation. If you are considering entering into a debt consolidation plan, you may want to see a bankruptcy attorney first. He or she can analyze your debt and determine if debt consolidation is a good choice for you. An attorney can also review the debt consolidation contract and make sure that it is a legitimate company.
Credit is not the tool you think it is. Remember that credit card companies are in the business of making money. Adopting a "Cash is king" policy will go a long way in stopping your dependency on credit.

Practical Accounting Knowledge for Better Financial Decisions