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- Problem 3:Intercom Company is planning to refinance certain short-term obligations on a long term basis. The entity has a December 31 year-end and the 201 9 financial statements will be published on March 15, 2020.0n December 31, 2019, before reclassification of short-term debt, the liabilities are:Current liabilities:Accounts Payable 7,000,000Note payable-bank 12,000,000Accrued expenses 4,000,000Noncurrent liabilities:Mortgage payable 4,000,000Note payable-due in 2021 3,000,000The entity intends to refinance ₱9,000,000 of the₱ 12,000,000 bank note payable on a long term basisAlthough the entire ₱12,000,000 is due on June 30, 2020, the bank has informally agreed to extend the maturity date for₱ 6,000,000 to June 30, 2021, if necessary.On January 31, 2020, the entity issued share capital for₱ 4,000,000, net issue costs and underwriting fees of ₱500,000.On February 15, 2020, the entity entered into a financing agreement with a financially capable commercial bank, permitting the entity to…21 Details for one of the loan of BB Company that is probably impaired during the period is as follows: The company made a loan of P40,000,000 to a customer with similar credit risk to BB Company on January 1, 2021. Interest is receivable on this loan at the end of each year at 2% per annum for the next five years. The loan was properly recorded and classified as amortized cost. The company made and initial assessment of the loan and the total expected credit losses over the life of the loan was P1,000,000. The discount rate applicable was at 2%. On January 1, 2021, the probability of default over the next 12 months was 5%. At December 31, 2021, there was a significant increase in the credit risk on the loan made by BB Company, the expert assessed that the total expected credit losses over the life of the loan was increase to P2,200,000. The discount rate applicable was at 2%. How much is the balance of the allowance for credit losses as of December 31, 2021?8. A company owes $20,000 on a truck purchased. Assume the company makes timely principle payments of $5,000 each year at Dec 31st. Which of the following is true. a. after the 1st payment is made, $5000 would be shown as the current portion due on the long term note. b. after the 1st payment is made, the company owes $15,000 plus three years interest. c. Just before the last payment is made $5000 will appear as a long term liability on the balance sheet. d. after the 1st payment, $15,000 would be shown as a long term liability
- 25- Our company, which prepares its financial statements on a monthly basis, has leased its workplace on 01.08.2020 from 3.000 TL per month for 1 year. One-year rental fee and 18% VAT have been deposited into the bank account of the enterprise. Assuming that the financial statements are prepared on a monthly basis , in which account, how and in what amount is the rental income for the period January 2021-July 2021 recognized? a) 380 Revenues for the Next Months Hs .36.000 TL Creditor B) 380 Revenues for Future Months Hs. 12.000 TL Creditor NS) 380 Revenues for Future Months Hs. 12.000 TL Debt D) 480 Income for Future Years Hs. 21.000 TL Creditor TO) 480 Income for Future Years Hs. 21.000 TL DebtorQuestion Content Area On June 8, Williams Company issued an $72,668, 11%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? When required, round your answer to the nearest dollar. a. $7,993 b. $80,661 c. $72,668 d. $75,332Aa.15. On December 31, Year 1, Cardinal Company bought some new equipment that cost $25,000 and signed a Note Payable [NP] for $20,000. The remaining amount was paid in cash at the time of the purchase. The NP requires six equal semi-annual payments starting on June 30, Year 2. The principal and the interest expense related to the NP will be completely paid off on December 31, Year 4 as a result of these six equal payments. The note states an interest rate of 8% with semi-annual compounding on the payment dates. Answer the following: 1. What will be the size of each of the six semi-annual payments? $________ 2. How much Interest Expense will appear in Cardinal’s income statement for the year ended Dec. 31, Year 2? $___________ 3. What is the carrying value of the Note Payable in Cardinal’s balance sheet dated Dec. 31, Year 3? $_______
- 16. On 1 January 2022, Marina Tower exchanged equipment for an $800,000 zero-interest-bearing note due on January 1, 2023. The prevailing rate of interest for a note of this type at January 1, 2020 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Marina's 2023 income statement?Question 16Answera.$60,000b.$66,000c.$0d.$80,000. please answer do not image format41. The following transaction relate to Tool Company’s contingencies. The financial statements are dated December 31, 2023 and were issued on March 31, 2024. Tool’s products carry one –year warranty against manufacturer defects. Based on past experience, warranty costs are expected to be 4% of sales. Sales for 2023 were P2,000,000 and actual warranty cost incurred was P30,000. In December 2023, an NGO filed suit against Tool seeking penalties for violation of clean air laws. Tool’s counsel advised that is probable that the entity will lose the case and that the amount of penalty is P2,000,000. Appropriately, the entity recorded the liability. On January 15, 2024, Tools reached a settlement to pay P1,500,000 in penalty. Tools is the plaintiff in a P4,000,000 suit filed against a supplier. The attorney advised that it is probable that the entity will win the case and that the award is P2,500,000. On March 15, 2024, the court ruled in favor of Tools and received P2,000,000.…5. Calm Co. provides warranty for its products. Experience shows that 10% of products sold require warranty repairs and that 70% of the warranty costs are expended in the year of sale and 30% in the following year. Half of the defective products require minor repairs that cost 20% of the sale price, while the other half require major repairs that cost 70% of the sale price: A 3% risk adjustment factor is considered appropriate reflect the uncertainties in the cash flow estimates. Sales of P4,000,000 were made evenly throughout 20x1. The outflows for repairs in 20x2 (for the products sold in 20x1) are expected to take place on June 30, 20x2. The appropriate discount factor is 0.95238. How much is the warranty provision at December 31, 20x1? a. 264,857 b. 176,571 c. 105,943 d.52,971
- IA - Receivable Financing 10. Problem Solving. A company pledged its entire accounts receivable amounting to P2,500,000 to a financing institution to a loan approved for P2,000,000. The term of the loan requires the company to pay the principal when it becomes mature 4 years from now and also to pay 12% annual interest every end of the year. Should the company has made no collateral for the loan, interest rate could have been 18%. Assuming the transaction occurred on January 1, 20A, compute the total amount of expense that should be deducted from the current year’s income of the company. Round off final answer to the nearest peso.62. A hospitality company is the maker of an $18,000 note to be paid in quarterlyinstallments of $3,000 each. The first payment is to be made on June 30. How willthe note be represented on the balance sheet for May 31?A. $18,000 long-term liabilityB. $3,000 expense, $15,000 long-term liabilityC. $3,000 expense, $9,000 current liability, $6,000 long-term liabilityD. $12,000 current liability, $6,000 long-term liabilityCheck my work 10 The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,240. During the period, a customer returned a product that cost $930 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the example shown here. Use a + to indicate increase or a - for decrease. if the element is not affected, leave the cell blank. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). (Not all cells will require entry.) Hint Ask Print CHAIR COMPANY Horizontal Statements Model Balance Sheet Income Statement Statement of Cash Flow Stockholder's Equity Event Assets Liabilities + Revenue - Expense = Net Income Estimates Paid