AustinCommunityCollege

AccountingDepartment
Presents

Examples
9 Basicmathconcepts
9 Usedinaccountingapplications

ActualAccountingExamples
Someoftheconceptsmaybenewyou.

Dontworry
youwillcovertheseindetail.
Fornow
letsfocusonthemathconcepts.

Tools

Useyourcalculator

Printthenarrative

VerticalAnalysis
CourseSyllabus
GradingElement Points
Exams

450

Homework
Attendance

100
50

ClassActivities

200

Total

800

Percentages
Grading
Element
Exams

Points

Homework

100

12.50%

Attendance

50

6.25%

200

25.00%

800

100%

Class
Activities
Total

450

%
56.25%

450/800X100
100/800X100
50/800X100
200/800X100

56.25+12.5+6.25+25=100

HorizontalAnalysis
InflationRate:5%
CurrentSalary:$40,000
NewSalary:$42,500

Didthesalaryincreasekeepup
withtheinflationrate?

HorizontalAnalysis
EndingAmount BeginningAmount
BeginningAmount
$42,500 $40,000
$40,000

X100

$2,500
X100= 6.25%
$40,000

HorizontalAnalysis
PercentofIncrease:

6.25%
InflationRate:

5.00%

TakeHomePay
MonthlySalaryInformation:
Item
GrossPay
FederalIncomeTax
(FIT)
Social Security
Medicare

Data
$4,000
10%ofgrosspay
6.2%ofgrosspay
1.45%ofgrosspay

TakeHomePay
Item

Data

GrossPay $4,000
10%of
FIT

$4,000

grosspay
6.2%of
grosspay

(400)

4,000X.10

(248)

4,000X.062

grosspay

(58)

4,000X.0145

Social
Security
Medicare 1.45%of
Net

Amount

$3,294
4,000 400 248 58=3,294

Allocation
Twofriendscontributetoaninvestment:
FriendA $100,000
FriendB $200,000

Agreement:
after2years
allocatethevalue$500,000
basedontheoriginalcontributions

Step1
Determinethepercentagethateachoriginally
invested:
A

$100,000 33.33 100,000/300,000X100

33.33%

$200,000 66.67 200,000/300,000X100

$ 300,000 100%
RoundingIssue

66.67%

Step2
Allocatethe$500,000basedonthe%:
%

Allocationof
$500,000

33.33

$166,650

500,000X.3333

66.67

$333,350

500,000X.6667

100

$500,000

Average
BalanceSheetAmounts
Assets

12/31/X1

12/31/X2

$1,360,000

$1,840,000

(inthousands)

Theactualamountsare

$1,360,000,000and$1,840,000,000
Add3zeros

Average
BeginningAmount+EndingAmount
2
$1,360,000+$1,840,000
2
=$1,600,000
(inthousands)

Summary
ProperTools
Calculator,Excel,PencilandPaper

Reasonableanswer
Practice
Help
Instructor/Tutor
Classmates,friends,family