QUESTION 2 Balance Sheet The following information has been obtained for Bondy as at 30 June 20X6. $ 12 000 Prepaid insurance Income tax payable 18 000 Accounts receivable 15 000 Rent received in advance 5 000 Land (at fair value) 300 000 Vehicle (cost) 45 000 15 000 Accumulated depreciation - vehicle (1 July 2015) Depreciation expense- vehicle 5 000 Cash at bank 7 000 Loan payable (repayable in 2019) 000 Accrued expenses 8 000 Owners equity - closing ? Required: Prepare a properly classified statement of financial position in narrative format for Bondy Lt on 30 June 20X6. 60

QUESTION 2 Balance Sheet The following information has been obtained for Bondy as at 30 June 20X6. $ 12 000 Prepaid insurance Income tax payable 18 000 Accounts receivable 15 000 Rent received in advance 5 000 Land (at fair value) 300 000 Vehicle (cost) 45 000 15 000 Accumulated depreciation - vehicle (1 July 2015) Depreciation expense- vehicle 5 000 Cash at bank 7 000 Loan payable (repayable in 2019) 000 Accrued expenses 8 000 Owners equity - closing ? Required: Prepare a properly classified statement of financial position in narrative format for Bondy Lt on 30 June 20X6. 60

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter12: The Statement Of Cash Flows

Section: Chapter Questions

Problem 12.3E

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(Appendix 21.1) Comprehensive The following are Adair Companys December 31, 2018, post-closing trial balance and the December 31, 2019, adjusted trial balance: A review of the accounting records reveals the following additional information for 2019: Investments in bonds to be held to maturity were purchased at year-end for 8,600. A building was purchased for 28,000. A note payable was issued for 9,000. Common stock was issued for 14,500. Dividends of 6,500 were declared and paid. Required: 1. Using the direct method for operating cash flows, prepare a spreadsheet to support the 2019 statement of cash flows for Adair. 2. Prepare the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)
(Appendix 14.1)Pamlico Company has a 500,000, 15%, 3-year note dated January 1, 2019, payable to Forest National Bank. On December 31, 2020, the bank agreed to settle the note and unpaid interest of 75,000 for 50,000 cash and marketable securities having a current market value of 375,000. Pamlicos acquisition cost of the securities is 385,000. Ignoring income taxes, what amount should Pamlico report as a gain from the debt restructuring on its 2020 income statement? a. 65,000 b. 75,000 c. 140,000 d. 150,000
Note Payable and Accrued Interest Fairbome Company borrowed $60,000 on an 8%, interest-bearing note on October 1, 2019. Fairborne ends its fiscal year on December 31. The note was paid with interest on May 1, 2020. Required: 1. Prepare the entry for this note on October 1, 2019. 2. Prepare the adjusting entry for this note on December 31, 2019. 3. Indicate how the note and the accrued interest would appear in the balance sheet at December 31, 2019. 4. Prepare the entry to record the repayment of the note on May 1, 2020.
Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued October 1, 2019, are due September 30, 2020, and pay interest semiannually on March 31 and September 30. Assume an effective yield rate of 14%. Required: 1. Prepare a bond interest expense and discount amortization schedule using the straight-line method. 2. Prepare a bond interest expense and discount amortization schedule using the effective interest method. 3. Prepare adjusting entries for the end of the fiscal year December 31, 2019, using the: a. straight-line method of amortization b. effective interest method of amortization 4. If income before interest and income taxes of 30% in 2020 is 500,000, compute net income under each alternative. 5. Assume the company retired the bonds on June 30, 2020, at 98 plus accrued interest. Prepare the journal entries to record the bond retirement using the: a. straight line method of amortization b. effective interest method of amortization 6. Compute the companys times interest earned (pretax operating income divided by interest expense) for 2020 under each alternative.
Additional relevant information:1. Accumulated depreciation is a contra account for all the depreciable assets. Depreciation on these assets totaled $2,200 for the year.2. On January 1, 2016, the company issued 10% bonds with a face value of $5,000 at 106. Interest was paid semiannually on June 30 and December 31. The bonds mature on January 1, 2021. Straight-line amortization is used for bond discount or premium. Bond interest expense was $440.3. Land was purchased for $3,200 during the year.4. Two hundred shares of common stock were issued for delivery equipment valued at $2,900 and office equipment valued at $3,100.5. Twenty shares of stock were issued as a stock dividend. The market price per share was $42.6. Office equipment with a cost of $1,000 and a book value of $300 was sold for $50.7. Fifty shares of its own common stock were reacquired by the company as treasury stock. The company purchased the shares for $40 per share.8. One hundred shares of Scan House Company stock were…
Question 1- prepare the journal entries for following information:- (1)- By June 30, 2024, property taxes had been collected in the amount of $475,000; $300,000 was invested in temporary investments that earn 2.6 percent per annum. Required: Prepare the journal entry to record the amount invested. (2)- Bond interest of $37,500 due July 1, 2024 on the deferred serial bonds issued in 2023 and $82,500 on the 2.75% serial bonds issued in 2024 was paid on July 1. Required: Prepare the journal entry to record the payment of interest. (3)- During the second half of 2024, property taxes were collected in the amount of $150,000. Required: Prepare the journal entry to record the receipt of current property taxes.
QUESTION 5 On 1 January 2017, Entity A bought a $250,000 5.25% bond for $236,000. It incurred issue costs of $2,820. Interest is received in arrears. The bond will be redeemed at a premium over the face value on 31 December 2019. The effective interest rate is 8.75%. The fair value of the bond was as follows: 31 December 17 : $265,600 31 December 18 : $256,480 31 December 19 : $273,560 REQUIRED: (1) Measure the amounts recognised in the Statement of Financial Position for the financial asset on 31 December 2018 if Entity A originally planned to hold the bond until the redemption date. (2) Measure the amounts of Gain or Loss on remeasurement recognised in the Statement of Profit or Loss and Other Comprehensive Income for the financial asset for the year of 2018 if Entity A originally planned to hold the bond to maturity and may also sell the bond when the possibility of an investment with a higher return arises. (3) Measure the amounts of Gain or Loss on remeasurement…
QUESTION 3 / Review ABC Co purchased a debt instrument for $1,000 on January 1, 20X1. The debt instrument is due to mature on December 31, 20X5. The instrument has a $1,250 principal amount and a fixed interest rate of 4.72 % that is paid yearly (pay in arrears). The effective interest rate is 10%. How should ABC Co account for the debt instrument over its 5-year term?
Problem 9-95AReporting Long-Term Debt Fridley Manufacturing's accounting records reveal the following account balances after adjusting entries are made on December 31, 2018: Accounts payable $ 62,500 Bonds payable (9.4%, due in 2025) 800,000 Lease liability* 41,500 Bonds payable (8.7%, due in 2021) 50,000 Deferred tax liability* 133,400 Discount on bonds payable (9.4%, due in 2025) 12,600 Income tax payable 26,900 Interest payable 38,700 Installment note payable (8% equal installments due 2019 to 2022) 120,000 Notes payable (7.8%, due in 2023) 400,000 Premium on notes payable (7.8%, due in 2023) 6,100 Zero coupon note payable, $50,000 face amount, due in 2024 (net of discount) 31,900 * Long-term liability Required: Prepare the current liabilities and long-term debt portions of Fridley's statement of financial position at December 31, 2018. Provide a separate line item for each issue (do not combine separate bonds or notes…
A company purchased machinery on December 31, 2026, paying P80,000 down and agreeing to pay the balance in 4 equal installments of P60,000 payable each December 31. Implicit in the purchase price is an assume interest of 12%. What is the carrying amount of the note at December 31, 2027?(PVF 5 decimal)
Requirement 3. Prepare a comprehensive income statement for Thyme Investments for year ended December 31, 2018. Assume net income was $320,000. (Use a minus sign or parentheses to enter a loss.) 2018 Jan. 5 Purchased Vince Company's $525,000 bond at face value. Thyme classified the investment as available-for-sale. The Vince bond pays interest at the annual rate of 6% on June 30 and December 31 and matures on December 31, 2021 Management's intent is to keep the bonds for several years . June 30 Received an interest payment from Vince Dec.31 Received an interest payment from Vince. Dec.31 Adjusted the investment to its current market value of $518.500 .
Immediate Accounting ll Ch 16 2. Arnold Industries has pretax accounting income of $56 million for the year ended December 31, 2024. The tax rate is 25%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2024. An $32 million advance rent payment at the inception of the lease is tax-deductible in 2024 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over the four-year lease term. Required: Complete the following table given below and prepare the appropriate journal entry to record Arnold’s income taxes for 2024. Prepare the appropriate journal entry to record Arnold’s income taxes for 2025. Pretax accounting income was $80 million for the year ended December 31, 2025. Assume a new tax law is enacted in 2025 that causes the tax rate to change from 25% to 15% beginning in 2026. Complete the following table given below and…