2019 Vol 1 Ch 5 Answers PDF

Preview

Summary

Chapter 5 Financial Liabilities (Jefferson Corporation) (a)(1) Gross method Dec. 16 19 1,400 Purchases Accounts Payable Celeron 26 Accounts Payable Intel Purchase Discounts Cash 31 Accounts Payable Celeron Purchase Discounts Cash (a)(2) 67,400 67,400 1,320 66,080 1,440 70,560 Net method Dec. 16 19 P...

Description

Chapt er5 - Fi nanci alLi abi l i t i es 51.

( Jeffer sonCor por at i on) ( a) ( 1) Gr ossme t hod Dec .16

19

26

31

Pur chase s Fr ei ghti n Account sPayabl e–I nt el

66, 000 1, 400 67, 400

Pur chases Account sPayabl e–Ce l er on

72, 000

Account sPayabl e–I nt el Pur chaseDi scount s Cas h

67, 400

Account sPayabl e–Ce l er on Pur chaseDi scount s Cas h

72, 000

72, 000

1, 320 66, 080

1, 440 70, 560

( a) ( 2) Netme t hod Dec.16

19

26

31

( b)

64, 680 1, 400 66, 080

Pur chases Account sPayabl e–Ce l er on

69, 840

Account sPayabl e–I nt el Cas h

66, 080

Account sPayabl e–Ce l er on Pur chaseDi scount sLost Cas h

69, 840 720 70, 560

69, 840

66, 080

Adj ust i ngent ryatDecember31undert hene tmet hod

Dec.31

52

Pur chases Fr ei ghti n Account sPayabl e–I nt el

Pur chaseDi scount sLost Account sPayabl e–Ce l er on

720 720

( Washi ngt onCompany) Repor t edamountofac count spayabl eatDecember31,2018 Adj ust ment s: Unr ecor dedc heckwr i t t enandi ssuedonDecember27 Unr ecor dedpur chasesr ecei v edonDecembe r28,net Goodspur chasedFOB shi ppi ngpoi nts t i l li nt r ansi tandnot yetr ecor dedatyearend De bi tbal ancei nasuppl i er ’ saccountnet t edi nt hebal ance Cor r ectamountofaccount spayabl eatDecembe r31,2018

P1, 000, 000 ( 350, 000) 147, 000 120, 000 80, 000 P 997, 000

Chapt er5–Fi nanci alLi abi l i t i es

53.

( AdamsCompany) Repor t edamountofac count spayabl eatDecember31,2018 P1, 500, 000 Adj ust ment s: Goodspur chasedFOB shi ppi ngpoi ntl os ti nt r ansi t 240, 000 Cr edi tmemof orgoodsr et ur nedt osuppl i ernotr ecor dedatyear end ( 80, 000) Cor r ectamountofaccount spayabl eatDecembe r31,2018 P1, 660, 000

54.

( Madi sonCompany) ( a) 2019 May1 Aut omobi l e 3, 600, 000 Di scountonNot esPayabl e 324, 000 Not esPayabl e 3, 924, 000/1. 09=3, 600, 000 Dec.31I nt er es tExpense 216, 000 Di scountonNot esPayabl e 324, 000x8/12=216, 000 2020 Apr .1 I nt er estExpense 108, 000 Not esPayabl e 3, 924, 000 Di scountonNot esPayabl e Cas h 324, 000–216, 000=108, 000 ( b)

55.

Not esPayabl e Le ssDi scountonNot esPayabl e Netamount ,Decembe r31,2019

3, 924, 000

216, 000

108, 000 3, 924, 000

P3, 924, 000 108, 000 P3, 816, 000

( Monr oeCorpor at i on) ( a) 2019 June1 Cas h 2, 700, 000 Di scountonNot esPayabl e 300, 000 Not esPayabl e 3M x10% =300, 000 3M –300, 000=2, 700, 000 Dec.31I nt er es tExpense Di scountonNot esPayabl e 300, 000x7/12

175, 000 175, 000

2020 May31I nt er estExpense 125, 000 Not esPayabl e 3, 000, 000 Di scountonNot esPayabl e Cas h 300, 000–175, 000=125, 000 ( b)

Not esPayabl e Le ssDi scountonNot esPayabl e Netamount ,Decembe r31,2019

3, 000, 000

125, 000 3, 000, 000

P3, 000, 000 125, 000 P2, 875, 000

59

Chapt er5–Fi nanci alLi abi l i t i es

56.

( Uni sonCompany) ( a)

Mar ketr at eofi nt er esti s5% Pr i nci pal St at edi nt er est( 8M x9%) Mat ur i t yval ue PVf act orat5% f or1per i od Pr esentval ueofnot eatMay1,2019 Faceval ueofnot e Pr emi um onnot espay abl e

2019 May1 Equi pment Pr emi um onNot esPay abl e Not esPayabl e Dec.31I nt er es tExpense Pr emi um onNot esPay abl e I nt er estPayabl e 304, 928x8/12 =203, 285 8M x9% x8/12=480, 000

P8, 000, 000 720, 000 P8, 720, 000 0. 9524 P8, 304, 928 8, 000, 000 P 304, 928

8, 304, 928 304, 928 8, 000, 000 276, 715 203, 285 480, 000

2020 Apr .30I nt er estExpense 138, 357* Pr emi um onNot esPay abl e 101, 643 I nt er estPayabl e 480, 000 Not esPayabl e 8, 000, 000 Cas h 304, 928–203, 285=101, 643 * di ffer encei sduet or oundi ngoff. Not esPayabl e Pr emi um onNot esPayabl e I nt er estPayabl e Car r yi ngamountatDecember31,2019 ( b)

8, 720, 000

P8, 000, 000 101, 643 480, 000 P8, 581, 643

Mar ketr at eofi nt er esti s12% Pr i nci pal St at edi nt er est( 8M x9%) Mat ur i t yval ue PVf act orat12% f or1per i od Pr esentval ueofnot eatMay1,2019 Faceval ueofnot e Di scountonnot espayabl e

2019 May1 Equi pment Di scountonNot esPayabl e Not esPayabl e

P8, 000, 000 720, 000 P8, 720, 000 0. 8929 P7, 786, 088 8, 000, 000 P 213, 912

7, 786, 088 213, 912 8, 000, 000

Dec.31I nt er es tExpense Di scountonNot esPayabl e I nt er estPayabl e 213, 912x8/12 =142, 608 8M x9% x8/12=480, 000

60

622, 608 142, 608 480, 000

Chapt er5–Fi nanci alLi abi l i t i es

2020 Apr .30I nt er estExpense 311, 304 I nt er estPayabl e 480, 000 Not esPayabl e 8, 000, 000 Di scountonNot esPayabl e Cas h 213, 912–142, 608=71, 304 * di ffer encei sduet or oundi ngoff. Not espayabl e Di scountonnot espay abl e I nt er estpayabl e Car r yi ngamountatDecember31,2019

57.

71, 304 8, 720, 000

P8, 000, 000 ( 71, 304) 480, 000 P8, 408, 696

( KFC Del i ver yServi ce)

( a)

Effect i vei nt er es tmet hod 6, 949, 800/9, 000, 000=0. 7722 Usi ngTabl eI I–PVofP1,unde r3per i ods,0. 7722i sunder9% i nt er estr at e

( b) Tabl eofAmor t i zat i on Dat e Amor t i z at i onofDi scount Car r yi ngVal ue 4/1/18 6, 949, 800 3/31/19 625, 482 7, 575, 282 3/31/20 681, 775 8, 257, 057 3/31/21 742, 943* 9, 000, 000 * Rounde d;di ffer encei sduet or oundi ngoff. ( c)

I nt er estexpensef ory earendedDecember31,2019: Januar y1–Apr i l1 625, 482x3/12 Apr i l1–December31 681, 775x9/12 Tot ali nt er estexpense Car r yi ngamount ,Apr i l1,2018 Addamor t i z at i onofdi scount 625, 482x9/12 Car r yi ngamount ,December31,2018

P156, 371 511, 331 P667, 702 P6, 949, 800 469, 112 P7, 418, 912

( d) 2018

Apr i l1 Land Di scountonNot esPayabl e Not esPayabl e

6, 949, 800 2, 050, 200 9, 000, 000

Dec31 I nt er estExpense Di scountonNot esPayabl e

469, 112 469, 112

2019

Jan1. Di scountonNot esPayabl e

469, 112

61

Chapt er5–Fi nanci alLi abi l i t i es

I nt er estExpense

469, 112

Apr i l1 I nt er estExpense Di scountonNot esPayabl e

625, 482

Dec.31I nt er es tExpense Di scountonNot esPayabl e

511, 331

625, 482

511, 331

2020

Jan1. Di scountonNot esPayabl e I nt er estExpense

511, 331

Mar . 31 I nt er estExpense Di scountonNot esPayabl e

681, 775

Dec.31I nt er es tExpense Di scountonNot esPayabl e

511, 331

511, 331

681, 775

511, 331

2021

Jan1. Di scountonNot esPayabl e I nt er estExpense

511, 331

Mar . 31 I nt er estExpense Di scountonNot esPayabl e

742, 943

511, 331

31 Cas h

625, 482 9, 000, 000

Not esPayabl e

58.

9, 000, 000

( JFC Company) ( a)

I nt er estExpense 2018=6, 949, 800x9% x8/12 2019=6, 949, 800x9% x4/12= 6, 949, 800x1. 09=7, 575, 282 7, 575, 282x9% x8/12= 2020=7, 575, 282x9% x4/12= 7, 575, 282x1. 09=8, 257, 057 8, 257, 057x9% x8/12

P416, 988 208, 494 454, 517 227, 258 495, 423

P663, 011

P722, 681

( b)

Not esPayabl e I nt er estPayabl e( 416, 988+663, 011) Tot alNot e sPayabl e,i ncl udi ngaccr uedi nt er est

P6, 949, 800 1, 079, 999 P8, 029, 799

( c)

On December31,2019,t henot espayabl ei ncl udi ngaccr ued i nt er estshal lber epor t ed among t he noncur r entl i abi l i t i es,si nce t hi s amountwi l lbe due af t ermor et han 12 mont hs. On December31,2020,t henot espayabl ei ncl udi ngaccr ued i nt er estshal lber epor t ed amongt hecur r entl i abi l i t i es,si ncet hi samountwi l lbedueonApr i l1,2021,ape r i odof l esst han12mont hs.

( d) 2018

May1 Land

6, 949, 800 Not esPayabl e

6, 949, 800

Dec. 31 I nt er estExpense I nt er estPayabl e

416, 988 416, 988

62

Chapt er5–Fi nanci alLi abi l i t i es

2019

Dec.31I nt er es tExpense I nt er estPayabl e

663, 011 663, 011

2020

Dec.31I nt er es tExpense I nt er estPayabl e

722, 681 722, 681

2021

Apr30 I nt er estExpense 247, 520 I nt er estPayabl e 6, 949, 800+416, 988+663, 011 +722, 681=8, 752, 480 9, 000, 000–8, 752, 480=247, 520 30 Not esPayabl e I nt er estPayabl e Cas h

59.

247, 520

6, 949, 800 2, 050, 200 9, 000, 000

( Wendy’ sCat er i ngSer vi ce) ( a)

( b)

Pr esentval ueoft henot e 800, 000x3. 2397

P2, 591, 760

Tabl eofAmor t i zat i on Per i odi c Amor t i z at i on Dat e Payment ofDi scount Car r yi ngVal ue 4/1/18 2, 591, 760 3/31/19 800, 000 233, 258 2, 025, 018 3/31/20 800, 000 182, 252 1, 407, 270 3/31/21 800, 000 126, 654 733, 924 3/31/22 800, 000 66, 076* 0* Rounde doff.

( c) 2018

Apr . 1

Equi pment Di scountonNot esPayabl e Not esPayabl e

2, 591, 760 608, 240 3, 200, 000

Dec. 31 I nt er estExpense Di scountonNot esPayabl e 233, 258x9/12

174, 944 174, 944

2019

Jan.1 Di scountonNot esPayabl e I nt er estExpense

174, 944

Mar 31 Not esPayabl e I nt er estExpense Cas h Di scountonNot esPayabl e

800, 000 233, 258

Dec. 31 I nt er estExpense Di scountonNot esPayabl e 182, 252x9/12

136, 689

174, 944

63

800, 000 233, 258

136, 689

Chapt er5–Fi nanci alLi abi l i t i es

2020

Jan.1 Di scountonNot esPayabl e I nt er estExpense

136, 689 136, 689

Mar 31 Not esPayabl e I nt er estExpense Cas h Di scountonNot esPayabl e

800, 000 182, 252

Dec. 31 I nt er estExpense Di scountonNot esPayabl e 126, 654 x9/12

94, 990

800, 000 182, 252

94, 990

2021

Jan.1 Di scountonNot esPayabl e I nt er estExpense

94, 990 94, 990

Mar 31 Not esPayabl e I nt er estExpense Cas h Di scountonNot esPayabl e

800, 000 126, 654

Dec. 31 I nt er estExpense Di scountonNot esPayabl e 126, 654 x9/12

94, 990

800, 000 126, 654

94, 990

2022

Jan.1 Di scountonNot esPayabl e I nt er estExpense

94, 990 94, 990

Mar 31 Not esPayabl e I nt er estExpense Cas h Di scountonNot esPayabl e

800, 000 66, 076 800, 000 66, 076

510 ( Bur gee’ sFoodCorpor at i on) Tabl eofAmor t i zat i on Per i odi c I nt er est Reduct i on Payment Expense ofPr i nci pal

( a)

Dat e 10/1/18 9/30/19 800, 000 9/30/20 800, 000 9/30/21 800, 000 9/30/22 800, 000 * Rounde doff.

233, 258 182, 252 126, 654 66, 076*

566, 742 617, 748 673. 345 733, 924

Car r yi ngVal ue 2, 591, 760 2, 025, 018 1, 407, 270 733, 924 0-

( b) ( Not et hatt heaut horopt ednott opr epar er e ver si ngent r i es. Rever si ngent r i esmay al sobemadeandr esul t i ngaccountbal anceswi l lbet hesame. 2018

Oc t .1 Equi pment Not esPayabl e

2, 591, 760 2, 591, 760

Dec.31I nt er es tExpense I nt er estPayabl e 233, 258x3/12

64

58, 315 58, 315

Chapt er5–Fi nanci alLi abi l i t i es

2019

Oc t .1 Not esPay abl e 566, 742 I nt er estPayabl e 58, 315 I nt er estExpense 174, 943 Cas h 233, 258x9/12=174, 943 Dec. 31 I nt er estExpense I nt er estPayabl e 182, 252x3/12

800, 000

45, 563 45, 563

2020

Oc t .1 Not esPay abl e 617, 748 I nt er estPayabl e 45, 563 I nt er estExpense 136, 689 Cas h 182, 252x9/12=136, 689 Dec. 31 I nt er estExpense I nt er estPayabl e 126, 654x3/12

800, 000

31, 664 31, 664

2021

Oc t .1 Not esPay abl e 673, 345 I nt er estPayabl e 31, 664 I nt er estExpense 94, 991 Cas h 126, 654x9/12=94, 991 Dec. 31 I nt er estExpense I nt er estPayabl e 66, 076x3/12

800, 000

16, 519 16, 519

2022

Oc t .1 Not esPay abl e 733, 924 I nt er estPayabl e 16, 591 I nt er estExpense 49, 485* Cas h 66, 076x9/12=49, 557* * Rounde d

800, 000

( c) Not esPayabl e I nt er estPayabl e Tot al s,December31,2019

Cur r ent P617, 748 45, 563 P663, 311

Noncur r ent P1, 407, 270 0P1, 407, 270

Tot al P2, 025, 018 45, 563 P2, 070, 581

511. ( RubyCor por at i on)

Bondi ssuepr i ce Nomi nali nt er es tf or2018 I nt er estexpense( Effect i vei nt er est )f or2018 Pr emi um/di scountamor t i z at i oni n2018 Bondcar r yi ngval ueatDecembe r31,2019 Nomi nali nt er es tf or2019 I nt er estexpensef or2019 Pr emi um/di scountamor t i z at i oni n2019 Bondcar r yi ngval ueatDecembe r31,2019

At8% 5, 405, 725 250, 000 216, 229 33, 771 5, 371, 954 500, 000 428, 351 71, 649 5, 300, 305

Comput at i ons: At8%: I s suepr i ce=( 5, 000, 000x0. 6756)+( 250, 000x8. 1109)

65

At12% 4, 632, 025 250, 000 277, 922 27, 922 4, 659, 947 500, 000 560, 970 60, 970 4, 720, 917

Chapt er5–Fi nanci alLi abi l i t i es

=3, 378, 000+2, 027, 725=5, 405, 725

Dat e 06/30/18 12/31/18 06/30/19 12/31/19

At12%:

I nt er est Pai d

I nt er est Expense

Pr emi um Amor t i z at i on

250, 000 250, 000 250, 000

216, 229 214, 878 213, 473

33, 771 35, 122 36, 527

Bond Car r yi ngVal ue 5, 405, 725 5, 371, 954 5, 336, 832 5, 300, 305

I ssuepr i ce=( 5, 000, 000x0. 5584)+( 250, 000x7. 3601) =2, 792, 000+1, 840, 025=4, 632, 025

Dat e 06/30/18 12/31/18 06/30/19 12/31/19

I nt er est Pai d

I nt er est Expense

Di scount Amor t i z at i on

250, 000 250, 000 250, 000

277, 922 279, 597 281, 373

27, 922 29, 597 31, 373

Bond Car r yi ngVal ue 4, 632, 025 4, 659, 947 4, 689, 544 4, 720, 917

512. ( Fi r eCompany) ( a)

I s suepr i ce Pr esentval ueoff ac eval ue ( 4, 000, 000x0. 6756) Pr esentval ueofi nt er estpayment s( 200, 000x8. 1109) I s suepr i ce

( b) Dat e 3/01/18 8/31/18 2/28/19 8/31/19

I nt er est Pai d 200, 000 200, 000 200, 000

Amor t i zat i onTabl e I nt er est Pr emi um Expense Amor t i z at i on 172, 983 27, 017 171, 903 28, 097 170, 779 29, 221

P2, 702, 400 1, 622, 180 P4, 324, 580

BondCar ryi ng Val ue 4, 324, 580 4, 297, 563 4, 269, 466 4, 240, 245

( c) 2018

Mar .1

Aug.31

Dec.31

Cash BondsPayabl e Pr emi um onBondsPayabl e

4, 324, 580 4, 000, 000 324, 580

I nt er estExpense Pr emi um onBondsPayabl e Cas h

172, 983 27, 017

I nt er estExpense( 171, 903x4/6) Pr emi um onBondsPayabl e I nt er estPayabl e( 200, 000x4/6)

114, 602 18, 731

I nt er estExpense( 171, 903x2/6) Pr emi um onBondsPayabl e( 28, 097x2/6) I nt er estpayabl e Cas h

57, 301 9, 366 133, 333

200, 000

133, 333

2019

Feb.28

66

200, 000

Chapt er5–Fi nanci alLi abi l i t i es

513. ( Mer curyCor por at i on) ( a) 2018

Aug.1

Dec.31

Cash 4, 458, 429 Di scountonBondsPay abl e 708, 238 I nt er estPayabl e BondsPay abl e 5M x8% x5/12=166, 667 4, 458, 429–166, 667=4, 291, 762 5, 000, 000–4, 291, 762=708, 238

I nt er estExpense 178, 823 I nt er estPayabl e Di scountonBondsPayabl e 5M x8% x5/12=166, 666 4, 291, 762x10% x5/12=178, 823 178, 823–166, 666=12, 157

166, 667 5, 000, 000

166, 666 12, 157

2019

Mar .1

I nt er estExpense 71, 529 I nt er estPayabl e 333, 333 Di scountonBondsPayabl e Cash 4, 291, 762x10% x2/12=71, 529 5M x8% x2/12=66, 667 71, 529–66, 667=4, 862 5M x8% =400, 000

4, 862 400, 000

Dec.31

I nt er estExpense 359, 065 Di scountonBondsPayabl e 25, 732 I nt er estPayabl e 333, 333 4, 291, 762+12, 157+4, 862=4, 308, 781 4, 308, 781x10% x10/12=359, 065 5M x8% x10/12=333, 333 359, 065–333, 333=25, 732 ( Amount scanbeconveni ent l ycomput edbyusi ngapar t i alamor t i z at i ont abl easf ol l ows) Effect i ve August1,2018 Febr uar y28,2019 Febr uar y28,2020

250, 353 430, 878

I nt er estexpensef or2018: I nt er estexpensef or2019:

Nomi nal 233, 333 400, 000

Amor t i z at i on 17, 020 30, 878

Car r yi ngval ue 4, 291, 762 4, 308, 782 4, 339, 659

250, 353x5/7=178, 824 ( 250, 353x2/7)+( 430, 878x10/12)=430, 594

Car r yi ngamount ,December31,2018: 4, 291, 762+( 17, 020x5/7)=4, 303, 919 Car r yi ngamount ,December31,2019: 4, 308, 782+( 30, 878x10/12)=4, 334, 514 ( b) 2018 August1–Decembe r31,2018 4, 291, 761x10% x5/12 Januar y1–Mar c h1,2019 4, 291, 761x10% x2/12 Mar ch1–Decembe r31,2019 4, 308, 780x10% x10/12 I nt er estExpensef ort heyear

67

2019

178, 823 71, 529

178, 823

359, 065 430, 594

Chapt er5–Fi nanci alLi abi l i t i es

( c) BondsPayabl e Le ssDi scountonBondsPayabl e Car r yi ngamount

December31,2018 Decembe r31,2019 P5, 000, 000 P5, 000, 000 696, 081 665, 487 P4, 303, 919 P4, 334, 513

514. ( Met alCor por at i on) I s suepr i ceofbondsandwar r ant s( 5, 000, 000x1. 08) MVofbondswi t houtwar r ant s( 5, 000, 000x1. 02) Val ueas si gnedt owar r ant s

P5, 400, 000 5, 100, 000 P 300, 000

( a)

Cash Pr emi um onBondsPayabl e BondsPayabl e Shar eWar r ant sOut st andi ng

5, 400, 000

Cash( 5, 000x2x140) Shar eWar r ant sOut st andi ng Or di nar yShar eCapi t al( 5, 000x2x100) Shar ePr e mi um -Or di nary

1, 400, 000 300, 000

( b)

100, 000 5, 000, 000 300, 000

1, 000, 000 700, 000

515. ( Onyx) ( a)

I ssuepr i ceofbondswi t hwar r ant s( 1, 000, 000x1. 04) Bondpr i cewi t houtwar r ant s 1, 000, 000x0. 4523 452, 300 100, 000x4. 5638 456, 380 Val ueofshar ewar r ant s

( b)

I nt er estExpensef or2018( 908, 680x12% x10/12)

( c)

Bondcar r yi ngval ue,Mar ch1,2018 Amor t i z at i ont hr oughDecember31,2018 908, 680x12% x10/12 1, 000, 000x10% x10/12 Bondcar r yi ngval ue,December31,2018

( d)

Cash( 1, 000x30x40) Shar eWar r ant sOut st andi ng Or di nar yShar eCapi t al( 30, 000x25) Shar ePr emi um -Or di nar y

P1, 040, 000

908, 680 P131, 320 P90, 868 P908, 680

90, 868 83, 333

7, 535 901, 145

1, 200, 000 131, 320 750, 000 581, 320

516. ( Cel er onCompany) ( a)

( b)

I ssuepr i ceofconv er t i bl ...