Jawaban TUTORIAL Liabiliti Semasa 2021 PDF

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FAKULTI EKONOMI & PENGURUSANPUSAT PENGAJIAN PERAKAUNANSem 2, Sesi 2020/EPPA 2023 PERAKAUNAN DAN PELAPORAN KEWANGAN II TUTORIAL 1LIABILITI SEMASA, PERUNTUKAN DAN LIABILITI KONTINGENCADANGAN JAWAPANE13 (LO1) (Statement of Financial Position Classification) How would each of the preceding items...

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FAKULTI EKONOMI & PENGURUSAN PUSAT PENGAJIAN PERAKAUNAN Sem 2, Sesi 2020/2021 EPPA 2023 PERAKAUNAN DAN PELAPORAN KEWANGAN II TUTORIAL 1 LIABILITI SEMASA, PERUNTUKAN DAN LIABILITI KONTINGEN

CADANGAN JAWAPAN E13.1 (LO1) (Statement of Financial Position Classification) How would each of the preceding items be reported on the statement of financial position? a. Accrued vacation pay. Current liability b. Income taxes payable. Current liability. c. Service-type warranties on appliance sales. Current liability or non-current liability depending on

term of warranty. d. Social Security taxes payable. Current liability. e. Personal injury claim pending. Footnote disclosure (assume possible not probable). f. Unpaid bonus to officers. Current liability. g. Deposit received from customer to guarantee performance of a contract. Current or non-current liability depending upon the time involved. h. Value-added tax payable. Current liability. i. Gift certificates sold to customers but not yet redeemed. Current liability. j. Premium offers outstanding. Current liability. k. Accounts payable. Current liability. l. Employee payroll deductions unremitted. Current liability. m. Current maturities of long-term debts to be paid from current assets. Current liability. n. Cash dividends declared but unpaid. Current liability. o. Dividends in arrears on preference shares. Footnote disclosure. p. Loans to officers. Separate presentation in either current or non-current liability section. E13.5 (LO1) (Debt Classifications) Presented below are four different situations related to Mckee plc debt obligations. Mckee's next financial reporting date is December 31, 2018. The financial statements are authorized for issuance on March 1, 2019. Instructions Indicate how each of these debt obligations is reported on Mckee's statement of financial position on December 31, 2018.

1. Mckee has a debt obligation maturing on December 31, 2021. The debt is callable on demand by the lender at any time.

Debt that is callable on demand by the lender at any time should be classified as a current liability. The callable on demand feature overrides the stated maturity of December 31, 2021. 2. Mckee also has a long-term obligation due on December 1, 2020. On November 10, 2018, it breaches a covenant on its debt obligation and the loan becomes due on demand. An agreement is reached to provide a waiver of the breach on December 8, 2018.

When there is a breach of a debt covenant, the debt is normally classified as a current liability. However, if the company is able to obtain a period of grace from the lender prior to the reporting date as Mckee did (the agreement was reached on December 8, 2018), the debt should be classified as non-current. 3. Mckee has a long-term obligation of £400,000, which is maturing over 4 years in the amount of £100,000 per year. The obligation is dated November 1, 2018, and the first maturity date is November 1, 2019.

Mckee should classify £100,000 of the obligation as a current maturity of long-term debt (current liability) and the £300,000 balance as a non-current liability. 4. Mckee has a short-term obligation due February 15, 2019. Its lender agrees to extend the maturity date of this loan to February 15, 2021. The agreement for extension is signed on January 15, 2019.

While the maturity of the obligation was extended to February 15, 2021, the agreement was not reached with the lender until January 15, 2019. Since the agreement was not in place as of the reporting date (December 31, 2018), the obligation should be reported as a current liability. E13.12 (LO2) (Warranties) Soundgarden Ltd. sold 200 color laser copiers on July 10, 2019, for £4,000 apiece, together with a 1-year warranty. Maintenance on each copier during the warranty period is estimated to be £330. Instructions Prepare entries to record the sale of the copiers, the related warranty costs, and any accrual on December 31, 2019. Actual warranty costs (inventory) incurred in 2019 were £17,000.

EXERCISE 13.12 (10–15 minutes) July 10, 2019 Cash (200 X £4,000) .......................................................................................... Sales Revenue .................................................................

800,000

800,000

During 2019 Warranty Expense.......................................................................

17,000

Inventory ..........................................................................

17,000

December 31, 2019 Warranty Expense....................................................................... Warranty Liability (£66,000-£17,000) ..............................

49,000

E13.17 (LO2,3) (Provisions and Contingencies) Presented below are three independent situations. Answer the question at the end of each situation. 1. During 2019, Maverick ASA became involved in a tax dispute with the government. Maverick's attorneys have indicated that they believe it is probable that Maverick will lose this dispute. They also believe that Maverick will have to pay the government between €800,000 and €1,400,000. After the 2019 financial statements were issued, the case was settled with the government for €1,200,000. What amount, if any, should be reported as a liability for this tax dispute as of December 31, 2019?

The IASB requires that, when some amount within the range of expected loss appears at the time to be a better estimate than any other amount within the range, that amount is accrued. When no amount within the range is a better estimate than any other amount, the expected value (midpoint of the range) should be used. In this case, therefore, Maverick ASA. would report a liability of €1,100,000 at December 31, 2019. 2. On October 1, 2019, Holmgren Chemical was identified as a potentially responsible party by its Environmental Regulatory Agency. Holmgren's management along with its counsel have concluded that it is probable that Holmgren will be responsible for damages, and a reasonable estimate of these damages is €6,000,000. Holmgren's insurance policy of €9,000,000 has a deductible clause of €500,000. How should Holmgren Chemical report this information in its financial statements at December 31, 2019?

The loss should be accrued for €6,000,000. The potential insurance recovery is a contingent asset—it is not recorded until received. According to IFRS, claims for recoveries may only be recorded if the recovery is deemed virtually certain. 3. Shinobi Ltd. had a manufacturing plant in Darfur, which was destroyed in the civil war. It is not certain who will compensate Shinobi for this destruction, but Shinobi has been assured by governmental officials that it will receive a definite amount for this plant. The amount of the compensation will be less than the fair value of the plant but more than its book value. How should the compensation be reported in the financial statements of Shinobi?

This is a contingent asset because the amount to be received will be in excess of the book value of the plant. Contingent assets are not recorded and are disclosed only when the probabilities are high (virtually certain) that a contingent asset will become reality. E13.19 (LO2) (Premiums) The following are three independent situations.

49,000

1.

Hairston Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Hairston's past experience indicates that only 80% of the stamps sold to licensees will be redeemed. Hairston's liability for stamp redemptions was $13,000,000 at December 31, 2018. Additional information for 2019 is as follows. Stamp service revenue from stamps sold to licensees $9,500,000 Cost of redemptions (stamps sold prior to 1/1/19)

6,000,000

If all the stamps sold in 2019 were presented for redemption in 2020, the redemption cost would be $5,200,000. What amount should Hairston report as a liability for stamp redemptions at December 31, 2019?

Liability for stamp redemptions, 12/31/18 Cost of redemptions redeemed in 2019

$13,000,000 (6,000,000) 7,000,000

Cost of redemptions to be redeemed in 2020 (5,200,000 X 80%)

4,160,000

Liability for stamp redemptions, 12/31/19 2.

$11,160,000

In packages of its products, Burnitz SA includes coupons that may be presented at retail stores to obtain discounts on other Burnitz products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Burnitz honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Burnitz estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Burnitz during 2019 is as follows. Consumer expiration date

12/31/19

Total face amount of coupons issued

€800,000

Total payments to retailers as of 12/31/19 330,000 What amount should Burnitz report as a liability for unredeemed coupons at December 31, 2019?

3.

Total coupons issued Redemption rate To be redeemed Handling charges ($480,000 X 10%) Total cost

$800,000 60% 480,000 48,000 $528,000

Total cost Total payments to retailers Liability for unredeemed coupons

$528,000 330,000 $198,000

Roland AG sold 700,000 boxes of pie mix under a new sales promotional program. Each box contains one coupon, which submitted with €4.00, entitles the customer to a baking pan. Roland pays €6.00 per pan and €0.50 for handling and shipping. Roland estimates that 70% of the coupons will be

redeemed, even though only 250,000 coupons had been processed during 2019. What amount should Roland report as a liability for unredeemed coupons at December 31, 2019?

Boxes Redemption rate Total redeemable

700,000 70% 490,000

Coupons to be redeemed (490,000 – 250,000) Cost ($6.50 – $4.00) Liability for unredeemed coupons

240,000 $2.50 $600,000

P13.5 (LO2) (Warranties) Brooks Ltd. sells computers under a 2-year warranty contract that requires the company to replace defective parts and to provide the necessary repair labor. During 2019, Brooks sells for cash 400 computers at a unit price of £2,500. On the basis of past experience, the 2-year warranty costs are estimated to be £155 for parts and £185 for labor per unit. (For simplicity, assume that all sales occurred on December 31, 2019.) The warranty is not sold separately from the computer. Instructions a. Record any necessary journal entries in 2019. b. What liability relative to these transactions would appear on the December 31, 2019, statement of financial position and how would it be classified? c. In 2020, the actual warranty costs to Brooks were £21,400 for parts and £39,900 for labor. Record any necessary journal entries in 2020.

PROBLEM 13.5 (a)

Cash (400 X

1,000,000

£2,500) ................................................................................................. ................................................................................................. Warranty Expense (400 X [£155 + £185])...............................

(b)

136,000

Sales Revenue ............................................................

1,000,000

Warranty Liability ........................................................

136,000

Current Liabilities: Warranty Liability (£136,000 ÷ 2) .................................

£68,000

Long-term Liabilities: Warranty Liability (£136,000 ÷ 2) .................................

£68,000

(c)

Warranty Liability.....................................................................

61,300

Inventory .......................................................................

21,400

Salaries and Wages Payable .......................................

39,900

P13.8 (LO2) (Premium Entries) To stimulate the sales of its Alladin breakfast cereal, Loptien NV places 1 coupon in each box. Five coupons are redeemable for a premium consisting of a children's hand puppet. In 2020, the company purchases 40,000 puppets at €1.50 each and sells 480,000 boxes of Alladin at €3.75 a box. From its experience with other similar premium offers, the company estimates that 40% of the coupons issued will be mailed back for redemption. During 2020, 115,000 coupons are presented for redemption. Instructions Prepare the journal entries that should be recorded in 2020 relative to the premium plan.

PROBLEM 13.8 Inventory of Premiums........................................................................... Cash............................................................................................. (To record purchase of 40,000 puppets at €1.50 each) During 2020 Cash ................................................................................................................. ................................................................................................................. Sales Revenue ............................................................................ (To record sales of 480,000 boxes at €3.75 each) Premium Expense .................................................................................. Inventory of Premiums ............................................................... [To record redemption of 115,000 coupons. Computation: (115,000 ÷ 5) X €1.50 = €34,500]

60,000 60,000

1,800,000

1,800,000

34,500 34,500

December 31, 2020 Premium Expense .................................................................................. Premium Liability ........................................................................ [To record estimated liability for premium claims outstanding at December 31, 2020.]

23,100 23,100

Computation: Total coupons issued in 2020........................................

480,000

Total estimated redemptions (40%) ...................................................... Coupons redeemed in 2020 ................................................................... Estimated future redemptions ...............................................................

192,000 115,000 77,000

Cost of estimated claims outstanding (77,000 ÷ 5) X €1.50 = €23,100 P13.14 (LO2) (Warranty and Coupon Computation) Schmitt Company must make computations and adjusting entries for the following independent situations at December 31, 2019. 1.

Its line of amplifiers carries a 3-year assurance-type warranty against defects. On the basis of past experience, the estimated warranty costs related to dollar sales are first year after sale—2% of sales; second year after sale —3% of sales; and third year after sale —5% of sales. Sales and actual warranty expenditures for the first 3 years of business were: Sales 2018 $

Warranty Expenditures

800,000

$ 6,500

2019

1,100,000

17,200

2020

1,200,000

62,000

Instructions Compute the amount that Schmitt Company should report as a liability in its December 31, 2020, statement of financial position. Assume that all sales are made evenly throughout each year with warranty expenses also evenly spaced relative to the rates above.

1.

Estimated warranty costs: On 2018 sales $ 800,000 X .10 ......................................................

$ 80,000

On 2019 sales $1,100,000 X .10 ......................................................

110,000

On 2020 sales $1,200,000 X .10 ......................................................

120,000

Total estimated costs .............................................................

310,000

Total warranty expenditures .................................................. Balance of liability, 12/31/20 ......................................................................

(85,700*) $224,300

*2018—$6,500; 2019—$17,200, and 2020—$62,000. The liability account has a balance of $224,300 at 12/31/20 based on the difference between the estimated warranty costs (totaling $310,000) for the three years’ sales and the actual warranty expenditures (totaling $85,700) during that same period. With some of its products, Schmitt Company includes coupons that are redeemable in merchandise. The coupons have no expiration date and, in the company's experience, 40% of them are redeemed. The liability for unredeemed coupons at December 31, 2018, was $9,000. During 2019, coupons worth $30,000 were issued, and merchandise worth $8,000 was distributed in exchange for coupons redeemed.

2.

Instructions Compute the amount of the liability that should appear on the December 31, 2019, statement of financial position.

2.

Computation of liability for premium claims outstanding: Unredeemed coupons for 2019 ($9,000 – $8,000) ..........................................................................

$ 1,000

2019 coupons estimated to be redeemed ($30,000 X .40) ..............................................................................

12,000

Total .........................................................................................

$13,000

SOALAN 2 Syarikat Pembungkusan Termaju (SPT) merupakan sebuah syarikat pengeluar bahan-bahan pembungkusan berkualiti tinggi bagi kegunaan pelbagai industri tempatan dan antarabangsa. Antara produk yang dihasilkan termasuk pembungkus makanan, produk perubatan dan pembedahan. Bagi memastikan syarikat sentiasa berdaya saing, SPT sangat mementingkan kepuasan pelanggannya. SPT mempunyai polisi jaminan pulangan wang sebanyak 5% hingga 9% daripada jumlah jualan kepada pelanggan yang tidak berpuashati dengan produk SPT. Pelanggan tidak dimaklumkan dengan polisi ini semasa membuat tempahan pembelian. Walau bagaimanapun, SPT akan melaksanakan polisi ini sekiranya pelanggan memaklumkan ketidakpuasan hati mereka. Berdasarkan pengalaman lepas, terdapat lebih kurang 3% daripada pelanggan yang menyatakan ketidakpuasan hati terhadap produk SPT. Pada 3 Februari 2019, sebuah mesin pengeluaran telah rosak. Juruteknik mesin telah diarahkan untuk membaiki mesin ini. Setelah mengambil masa selama 2 minggu, juruteknik mengesahkan bahawa mesin ini tidak boleh dibaiki lagi. Kos mesin tersebut ialah RM400,000. Susutnilai terkumpul mesin ialah RM120,000 dan anggaran nilai sisa ialah RM12,000. Manakala nilai saksama mesin tersebut ialah RM320,000. Syarikat mempunyai perlindungan insurans kerosakan bagi semua mesin pengeluarannya. Polisi insurans memberi perlindungan terhadap kerugian sehingga 70% daripada nilai dibawa mesin. Pada 3 Mac 2019, syarikat telah membuat tuntutan insurans bagi mesin ini dan sehingga 31 Disember 2019 belum lagi mendapat maklumat dari syarikat insurans berkenaan.

Pada 10 Ogos 2019, syarikat telah menerima notis daripada Kementerian Kesihatan Malaysia (KKM) menyatakan bahawa terdapat pembungkus produk perubatan dan pembedahan yang dijual dalam tempoh 3 bulan sebelumnya tidak memenuhi spesifikasi yang ditetapkan oleh KKM. KKM juga mengarahkan supaya SPT memanggil semula semua produk tersebut yang berada di dalam pasaran. Bagi tujuan penyediaan penyata kewangan, tahun kewangan SPT berakhir pada setiap 31 Disember. Dikehendaki: Bincangkan layanan perakaunan berdasarkan MFRS 137 Provision, Contingent Liabilities and Contingent Assets yang perlu dibuat oleh SPT pada 31 Disember 2019.

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