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revenue yable-bank yable (b) nclude two se 0% poto iccus

revenue yable-bank yable (b) nclude two se 0% poto iccus

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 9E: Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp....
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Canton Cave Company provided the following schedule of liabilities on December 31, 2014: P6,500,000 Accounts payable Unearned revenue 5,000,000 8,000,000 Notes payable - bank (a) Bonds payable (b) 4,000,000 Additional Information: a. Bank notes payable include two separate notes payable to First Bank: • A P3 million, 10% note issued March 1, 2014, payable on demand. Interest is payable every months. • A one-year term note amounting to P5 million, with 11% interest issued on January 2, 2014. b. The bonds payable are 10-year, 8% bonds, issued June 30, 2013. Interest is payable semi-annuall on June 30 and December 31. C. There is a pending litigation against Canton Cave Company because for copyright issues. The legal counsel estimates that the company would have to pay P4,000,000 in damages expected to be settled within 12 months. He assesses that the chance the company would pay is probable. d. During the year, Canton Cave introduced a new product that carries a warranty against defects. Expected warranty claims amount to 8% of total sales. Total sales for 2014 is 2,000,000 and the actual warranty expenditures is 70,000. The company recorded actual warranty expenditures directl as warranty expense. Present a partial statement of financial position, showing the current liabilities and noncurrent liabilities and the total liabilities. Follow the format below. ( Format: <Name of Company> Statement of Financial Position As of <date> Liabilities Current liabilities XX XX <amount> Noncurrent liabilities XX XX <amount> TOTAL LIABILITIES <AMOUNT> Total current liabilities Total noncurrent liabilities <amount> <amount> <amount> <amount>
Transcribed Image Text:Canton Cave Company provided the following schedule of liabilities on December 31, 2014: P6,500,000 Accounts payable Unearned revenue 5,000,000 8,000,000 Notes payable - bank (a) Bonds payable (b) 4,000,000 Additional Information: a. Bank notes payable include two separate notes payable to First Bank: • A P3 million, 10% note issued March 1, 2014, payable on demand. Interest is payable every months. • A one-year term note amounting to P5 million, with 11% interest issued on January 2, 2014. b. The bonds payable are 10-year, 8% bonds, issued June 30, 2013. Interest is payable semi-annuall on June 30 and December 31. C. There is a pending litigation against Canton Cave Company because for copyright issues. The legal counsel estimates that the company would have to pay P4,000,000 in damages expected to be settled within 12 months. He assesses that the chance the company would pay is probable. d. During the year, Canton Cave introduced a new product that carries a warranty against defects. Expected warranty claims amount to 8% of total sales. Total sales for 2014 is 2,000,000 and the actual warranty expenditures is 70,000. The company recorded actual warranty expenditures directl as warranty expense. Present a partial statement of financial position, showing the current liabilities and noncurrent liabilities and the total liabilities. Follow the format below. ( Format: <Name of Company> Statement of Financial Position As of <date> Liabilities Current liabilities XX XX <amount> Noncurrent liabilities XX XX <amount> TOTAL LIABILITIES <AMOUNT> Total current liabilities Total noncurrent liabilities <amount> <amount> <amount> <amount>
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