Additional Information: 1. The investment includes $4,000 invested in treasury bills, which will mature in July 1, 2021. The remaining investments carries a maturity period more than one year, ie., will mature in 2022. 2. The land account consists of $30,000 for the cost of the land where the office buildings are located. The remaining balance represent the cost of the land held for sale. 3. $9,500 of cash balance will be used as an investment in marketable securities that is going to take place next year. The remaining represent commercial papers due in January 2022. 4. The company entered into a contract with the real estate company. Accordingly, the company has paid advance rent equal to two years rent. Prepaid rent reported in the balance sheet is related to advance rent paid for 2021 and 2022. 5. Out of $15,000 balance of Bond payable, $7,000 will be payable in 2015. Required: Prepare classified balance sheet as per 31* December 2020.
Q: Molave Company had the following outstanding loans during 2021 and 2022. Specific construction loan…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: On January 1, 2022, the Spartan Equipment Company began construction of a building to be used as its…
A:
Q: On January 1, 2023, the Balmond Company began construction of a building to be used as its office…
A: Weighted-Average accumulated expenditure and interest capitalized Year 2023: Date Amount…
Q: LIME Co. decided to construct a building to expand its operations. The entity decided to obtain a…
A: As per IAS 23 (Borrowing costs ) An entity need to capitalize borrowing costs (Interest and other…
Q: In 2021, the Westgate Construction Company entered into a contract to construct a road for Santa…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: For 2019, Nirvana Industries disclosed cash revenue of $11.0 million and cash expenses of $6.0…
A: Net Cashflow for Nirvana Industries in 2019 = Cashflow from operating activities + cashflow from…
Q: During 2022, Romart Company constructed a new building at a cost of P30,000,000. The expenditures…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: For 2019, Nirvana Industries disclosed cash revenue of $12.0 million and cash expenses of $6.0…
A: CASH REVENUE = $12.0 million CASH EXPENSES= $6.0 million DEPRECIATION =$2.0million CAPITAL…
Q: ABC Company had the following general borrowings during 2011 which were used to finance the…
A: Weighted Average Capitalisation Rate = Borrowing CostAverage Borrowed Funds ×100 =…
Q: was finished late in 2020 were incurred evenly during the a cost of P30,000,000. The expenditures…
A: Capitalized interest = Interest loan for construction * Rate
Q: assume that the bank decided to give a loan of $ 59 million to Nivea Corporation (recorded for the…
A: Introduction: The payback period is nothing but how long it takes to recoup the cost of an…
Q: Use the following information for the next two questions: On January 1, 20x1, Entity A had the…
A: The capitalization rate is referred to as the effective interest rate of general borrowing. The…
Q: On January 1, 2021, Kendall Inc. began construction of an automated cattle feeder system. The system…
A: The question is related to Borrowing Cost. Weighted Average Accumulated expenditure is the product…
Q: During 2020, the following transactions took place: 1. The owners introduced new capital in the form…
A: 1. Income Statement 2. Balance Sheet The first statement shows the income earned and loss incurred…
Q: On January 1, 2021, John Kyle Corporation acquired land that will be used for management's office.…
A: The question is multiple choice question amd is related with Borrowing Cost. Required Choose the…
Q: How much borrowing cost shall be capitalized?
A: As per IAS 23 (Borrowing costs ) An entity need to capitalize borrowing costs (Interest and other…
Q: On January 1, 2021, John Kyle Corporation acquired land that will be used for management's office.…
A: PPE (property, plant & Equipment) is the total fixed asset which is being used to provide the…
Q: Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The…
A: Formula: Interest expense = Weighted average expense x borrowing rate Multiplying weighted average…
Q: On January 2, 2020, IRG Company began the construction of a small processing plant. The plant was…
A: a) Weighted-average accumulated expenditures for 2020. Jan 2, 2020 200000 x 12/12 200000 Sep…
Q: Use the following information for the next two questions: On January 1, 20x1, Entity A had the…
A: Here interest costs should be capitalized
Q: LIME Co. decided to construct a building to expand its operations. The entity decided to obtain a…
A: LIME Co. decided to construct building to expand its operations. Entity decided to obtain loan from…
Q: Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following…
A: The interest rate for specific borrowing: 10 % Amount Interest Rate Interest Cost $18,000…
Q: Cooper, Inc., is constructing a building that qualifies for interest capitalization. The following…
A: Capitalized interest is the interest which has been added in the unpaid interest account to be paid…
Q: On September 1, 2020, Peter Senen began a service proprietorship with an initial investment of…
A: Step 1 Under cash basis accounting incomes are recognized when collection is made out and expenses…
Q: ta Company is constructing a production complex that qualifies for interest capitalization. The…
A: The computation of the amount of interest cost capitalized of 2019 and 2020 is shown below:-…
Q: ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan…
A: Borrowing cost means where the assets like building , take substantial time to build , then interest…
Q: 1. What amount should be recognized as investment income for 2021 as a result of the investment? a.…
A: Investment refers to those mechanism which is used by the company for the purpose of generating…
Q: The Riverside Company is evaluating two mutually exclusive assets: Black and White, at the end of…
A: Net present value(NPV) is the difference between the present value of all future cash flows and…
Q: 1. Calculate the amount of interest that Mason should capitalize in 2021 and 2022 using the…
A: Given: Loan on Jan 1 2021 = $ 3 million Interest rate = $ 10 % Expenses: January 1, 2021 =…
Q: Situation 1 The entity had borrowings on January 1, 2020. Borrowings ware made from general purposes…
A:
Q: Minn is considering an investment proposal with the following cash flows: Initial…
A: Here, Initial investment-depreciable assets = $227,500 New cash inflows = $32,500…
Q: Snowbird Company is constructing a building that qualifies for interest capitalization. It is built…
A: Interest on Specific borrowing is to be capitalized from 1st April (Date from which recognition…
Q: During 2021, Colorado Company constructed a 3-storey building. The weighted average expenditures for…
A: Since it is given weighted average expenditure for capitalization, we consider the borrowing are…
Q: apitalization of interest during 2021 amounted to P 23,600,000. The existing debt of Colorado are…
A: SOLUTION- CAPITALIZATION RATE = (TOTAL INTEREST / TOTAL BORROWING ) *100…
Q: Illustration PROBLEM On January 1, 2019, Cagayan Company took out a loan of P24,000,000 in order to…
A: Borrowing costs incurred on qualifying assets up to the completion of qualifying assets are…
Q: On January 1, 2021, Dreamworld Co. began construction of a new warehouse. The building was finished…
A: Working:
Q: ABC Corporation funded the construction of its new plant through both specific and general…
A: A qualifying asset is an asset that essentially takes a substantial period to get ready for sale or…
Q: Use the following information for the next two questions: On January 1, 20x1, Entity A had the…
A: When a company had a general borrowing consisting of varying interest rates utilized for…
Q: per, Inc., is constructing a building that qualifies for interest capitalization. The following…
A: Step 1 Borrowing cost is the Interest cost or other cost which is directly incidental to arrangement…
Q: Balance Corporation borrowed P10,000,000 at 12% to finance in part the construction of a new office…
A: Borrowed = 10,000,000 at 12% Expenditures = 8,000,000 Entity earned interest = 80,000
Q: EEE Co. decided to construct a building to expand its operations. The entity decided to obtain a…
A: Borrowing cost as per IFRS requires that these costs should be added acquisition, construction or…
Q: ABC Co. had these loans outstanding for the year 2020: Specific Loan: P1,000,000 at 10% General Loan…
A: The expenditures incurred by ABC Company are calculated as per the weighted average method and…
Q: Coal Company began constructing a building for its own use in January 2023. During 2023, Coal…
A: Interest cost is generally treated as finance cost and is charged to the profit and loss account. It…
Q: Marie Company had a 10% P3,000,000 specific construction loan and 12% P25,000,000 general loan…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: REQUIRED: For the year ended 31 December 2019 show the following: 1. The Statement of…
A: As per the IFRS 'Borrowing Cost', Borrowing costs incurred to acquire the Qualifying Asset shall be…
Q: Maragondon Company had the following borrowings during 2018. The borrowings were made for general…
A: Given information: January 1 8,000,000June 30…
Q: Jen Company had a 10% P1,000,000 specific construction loan and 12% P20,000,000 general loan…
A: As per IAS 23 , Borrowings costs that are attributable to qualified asset will form part of cost of…
Q: Rona Co. had 9% P2,000,000 specific construction loan and 12% P15,000,000 general loan outstanding…
A: Cost of an asset is the expenditure incurred on it from purchasing or constructing to the point it…
Q: Sunshine Corporation is reviewing an investment proposal. The initial cost of the investment is R52…
A: 1. Year Cash inflows Cumulative Cash inflows 1 20000 20000 2 17500 37500 3 15000 52500 4…
Step by step
Solved in 2 steps with 1 images
- On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances:Accounts Debit CreditCash $ 25,100Accounts Receivable 46,200Allowance for Uncollectible Accounts $ 4,200Inventory 20,000Land 46,000Equipment 15,000Accumulated Depreciation 1,500Accounts Payable 28,500Notes Payable (6%, due April 1, 2022) 50,000Common Stock 35,000Retained Earnings…CAB Co. reported rent income of P600,000 under cash basis accounting for 2020. Additional Information are as follows: Dec. 31, 2020 Dec. 31, 2019 Unearned rent 50,000 30,000 75,000 Accrued rent income 40,000 How much is the rental collections on 2020?Alex Corporation has the following account balances on December 31, 2020: Accounts receivable ₱ 400,000 Allowance for uncollectible accounts 8,400 Alex completed the following transactions in 2019: Net credit sales, ₱ 4,000,000. Collections on accounts, ₱ 3,870,000. Write-off of uncollectible accounts, ₱ 10,000. Recovery of accounts previously written-off, ₱ 2,000. Uncollectible accounts expense, 2/3 of 1% of net credit sales. REQUIRED: 1. Journalize the foregoing transactions. 2. Compute the balance of accounts receivable and allowance for uncollectible accounts at December 31, 2020. What amount of Accounts receivable, net would Alex report on its December 31, 2020 balance sheet? 3. Assume that Alex uses the aging of accounts instead of the percent of sales method in estimating uncollectible accounts. Analysis indicates that Php 30,800 of outstanding accounts on December 31, 2020 may prove to be uncollectible. Compute the uncollectible accounts expense and the…
- The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances:Accounts Debits CreditsCash $ 41,500Accounts Receivable 25,700Land 110,800Accounts Payable $ 15,300Notes Payable (due in 2 years) 30,000Common Stock 100,000Retained Earnings 32,700Totals $178,000 $178,000The following is a summary of the transactions for the year:1. January 12 Provide services to customers on account, $62,400.2. February 25 Provide services to customers for cash, $75,300.3 March 19 Collect on accounts receivable, $45,700.4. April 30 Issue shares of common stock in exchange for $30,000 cash.5. June 16 Purchase supplies on account, $12,100.6. July 7 Pay on accounts payable, $11,300.7. September 30 Pay salaries for employee work in the current year,…At December 31, 2020, end of the annual reporting period, the accounts of ABC company showed the following: a. Sales Revenue for 2020, P 180,000 of which one-sixth was on credit b. Allowance for doubtful accounts, balance January 1, 2020, P900 credit c. Account Receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2019), P18,050 d. Uncollectible accounts to be written off, December 31, 2020, P1,050 e. Aging Schedule at December 31, 2020, showing the following breakdown of total accounts receivable: Status Amount Not past Due P10,000 Past Due 1-60 days 4,000 Past Due over 60 days 3,000 Required:1. Give the 2020 entry to write off the uncollectible accounts2. Give the 2020 adjusting entry to record bad debt expense for each of the following independent assumptions concerning bad debt loss rates:a. On total receivables at year-end, 2.5 percentb. On aging schedule: not past due, 0.5 percent; past due 1-60 days, 1 percent;…At December 31, 2020, end of the annual reporting period, the accounts of ABC company showed the following: a. Sales Revenue for 2020, P 180,000 of which one-sixth was on credit b. Allowance for doubtful accounts, balance January 1, 2020, P900 credit c. Account Receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2019), P18,050 d. Uncollectible accounts to be written off, December 31, 2020, P1,050 e. Aging Schedule at December 31, 2020, showing the following breakdown of total accounts receivable: Status Amount Not past Due P10,000 Past Due 1-60 days 4,000 Past Due over 60 days 3,000 Required:1. Give the 2020 entry to write off the uncollectible accounts.2. Give the 2020 adjusting entry to record bad debt expense for each of the following independent assumptions concerning bad debt loss rates:a. On total receivables at year-end, 2.5 percentb. On aging schedule: not past due, 0.5 percent; past due 1-60 days, 1 percent;…
- (MODIFIED) Spring Corporation has the following account balances on December 31, 2020: Accounts receivable Php 400,000 Allowance for uncollectible accounts8,400 Spring completed the following transactions in 2019: А. Net credit sales, Php 4,000,000. В. Collections on accounts, Php 3,870,000. С. Write-off of uncollectible accounts, Php 10,000. D. Recovery of accounts previously written-off, Php 2,000. Е. Uncollectible accounts expense, 2/3 of 1% of net credit sales. REQUIRED: A. Journalize the foregoing transactions. Compute the balance of accounts receivable and allowance for uncollectible accounts at December 31, 2020. What amount of Accounts receivable, net would Spring report on its December 31, 2020 balance sheet? Assume that Spring uses the aging of accounts instead of the percent of sales method in estimating uncollectible accounts. Analysis indicates that Php 30,800 of outstanding accounts on December 31, 2020 may prove to be uncollectible. Compute for the uncollectible accounts…The following information is available for Martin Services for the year ended December 31, 2019. Accounts receivable Bal. Jan. 1, 2019 $20, 500 Allowance for doubtful accounts, Jan 1, 2019 1,000 Cr. Sales Revenue for 2019 (40% on credit) 600,000 Bad debt write-offs during 2019 1,500 Bad debt recoveries during 2019 600 Collections on account during 2019 230,000 Assume that Martin Services uses the percent-of-accounts-receivable method of estimating bad debts, at the rate of 4%. Calculate the amount of the bad-debt expense for Martin Services for the year ended December 31, 2019.The allowance for doubtful accounts of Beta Care Limited had a credit balance of $1,500 at December 31, 2019, before the current year provision for uncollectible accounts. Based on historical data, the Accountant prepared the following schedule: Period $ % Estimated CollectibleCurrent 200,000.00 99%1-30 days 50,000.00 97%31-60 days 20,000.00 94%61-90 days 10,000.00 90%Over 90 days 5,000.00 80%Total Accounts Receivable 285,000.00 Required:3. Assume that the Allowance for doubtful account had a $1,500 debit balance. Prepare the journal entry for the current year provision.
- The allowance for doubtful accounts of Beta Care Limited had a credit balance of $1,500 at December 31, 2019, before the current year provision for uncollectible accounts. Based on historical data, the Accountant prepared the following schedule: Period $ % Estimated CollectibleCurrent 200,000.00 99%1-30 days 50,000.00 97%31-60 days 20,000.00 94%61-90 days 10,000.00 90%Over 90 days 5,000.00 80%Total Accounts Receivable 285,000.00 Required:1. Determine the total uncollectible Accounts Receivable as at December 31, 2019.2. Journalize the entry on December 31, 2019 to recognize bad debt expense. 3. Assume that the Allowance for doubtful account had a $1,500 debit balance. Prepare the journal entry for the current year provision. 4. Assume that on December 31, 2019, a previously written off account of $900, was subsequently collected. Prepare the journal entry required to record the collection.The allowance for doubtful accounts of Beta Care Limited had a credit balance of $1,500 at December 31, 2019, before the current year provision for uncollectible accounts. Based on historical data, the Accountant prepared the following schedule: Period $ % Estimated CollectibleCurrent 200,000.00 99%1-30 days 50,000.00 97%31-60 days 20,000.00 94%61-90 days 10,000.00 90%Over 90 days 5,000.00 80%Total Accounts Receivable 285,000.00 Required:4. Assume that on December 31, 2019, a previously written off account of $900, was subsequently collected. Prepare the journal entry required to record the collection.Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts Receivable and the related Allowance for Doubtful Accounts were 1,200,000 and 60,000, respectively. An aging of accounts receivable indicated that 106,000 of the December 31, 2019, receivables may be uncollectible. The net realizable value of accounts receivable at December 31, 2019, was: a. 1,034,000 b. 1,094,000 c. 1,140,000 d. 1,154,000