substantive procedures the auditor should perform
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A:
Q: Intercom Company is planning to refinance certain short-term obligations on a long term basis. The…
A: Solution are as follows.
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A: Notes Payable are the debt instrument which has been used by the organisation to arrange a short…
Q: During the course of your December 31, 2021 audit of BeCareful Company’s liabilities, you have noted…
A:
Q: You are the new controller for Moonlight Bay Resorts. The company CFO has asked you to determine the…
A: Calculating the current price of the bonds. We have,Price of bond = C x [1-(1+r)-n ]/r + F / (1+r)n…
Q: Whispering Company uses the LIFO method for financial reporting purposes but FIFO for internal…
A: LIFO reserve is the difference between FIFO inventory cost and LIFO inventory cost. LIFO effect is…
Q: The adjusted trial balance for Waterway Industries at the end of the current year, 2021, contained…
A: Liabilities other than the current liabilities are called long-term liabilities.
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A: Long-term liabilities are amount due after 12 months.
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A: Solution Given Coupon rate 10% Market rate of interest 12% interest is due every…
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A: Bonds payable are referred to long-term debts of the business, issued to various lenders known as…
Q: Tamarisk Company in its first year of operations provides the following information related to one…
A: (a) Available-for-sale securities should be recorded at the fair value. Therefore, difference…
Q: n connection to your audit of James Bond Company for the year ended December 31, 2020, you noted the…
A: NOTE : As per BARTLEBY guidelines, when multiple questions are given then first question is to be…
Q: You are in charge of auditing PLM (PopoyLangMalakas) Company's investment accounts for the year…
A: When a high rate of interest is credited, then to reduce the income interest account to be debited.
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A: INTRODUCTION: The liability account for notes payable is a component of the general ledger.…
Q: Consider the following liabilities of Future Brands, Inc., at December 31, 2021, the company’s…
A: 1. Current liability—The requirement to classify currently maturing debt as a current liability…
Q: Connie's Bistro, Inc., reported the following information about its long-term debt in the notes to a…
A: The current portion of the long-term debt shall refer to the current liabilities that are to be…
Q: The adjusted trial balance for Bramble Corp. at the end of the current year, 2018, contained the…
A: Solution: Total long term liabilities reported on balance sheet = Bond payable + Premium on bond…
Q: If the company issued RO 100,000 , 5% interest, 10-year bonds at 98 on January 1, 2021, which of the…
A: Answer Bond issued = RO98 Face value per BOND = RO100 Discount price per BOND = (RO100 - RO98) = RO2…
Q: Kingbird Inc. has issued three types of debt on January 1, 2020, the start of the company's fiscal…
A:
Q: The Liabilities and stockholder's equity statement of the GLOBE Corporation for two years, is shown…
A: Total liabilities = currentnt liabilities + long term liabilities
Q: amount of current liabilities should be reported
A: Current liabilities are short-term debts to be repaid within one accounting year.
Q: Consider the following liabilities of Future Brands, Inc., at December 31, 2018, the company’s…
A:
Q: On May 1, 2022, Cucumber Corporation issued $860,000, 12%, 5-year bonds at face value. The bonds…
A: Since you have posted a question with multiple sub-parts , we will do the first three sub-parts of…
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A: Liabilities can be classified as current liabilities or long-term debt depends on their due period.
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Q: Weed Company prepared a draft of its 2020 Statement of Financial Position. The draft statement…
A: 1. Mortgage Payable is Non current Liability 2. Discount on bonds payable will be reduced from Bonds…
Q: You are now in the completion stage of your audit of the financial statements of Endgame Inc. for…
A: Contingent Liability It is important for the business entity to provide the reserves for the…
Q: On March 1, 2021, FLAXSEED Inc. issued at 97, including accrued interest, 2,550 of its 10%, ₱1,000…
A: Bonds are a form of debt or loan that is issued by the corporation, on which interest needs to be…
Q: You are the new controller for Moonlight Bay Resorts. The company CFO has asked you to determine the…
A: Interest Expense on Bonds = Amount Initially Recognized x Effective Interest Rate Initial…
Q: Al Jabel Corporation is preparing financial statement for the year ended December 31, 2019. For each…
A: A current liability is a liability for an entity that is payable within the next financial year…
Q: Consider the following liabilities of Future Brands, Inc., at December 31, 2016, the company’s…
A: $77 million of 8% bonds are callable on March 1, 2017, so these must be reported as a current…
Q: You are the new controller for Moonlight Bay Resorts. The company CFO has asked you to determine the…
A: Interest Expense is calculated on the effective Rate of Interest. The effective rate of Interest is…
Q: On July 1, 2022, an auditing firm obtained a three-year 10% note receivable for auditing services…
A: Issue price of the note = Present value of principal + Present value of interest payments where,…
Q: At December 31, 2020, Coronado Corporation has the following account balances: Bonds payable, due…
A: Total liabilities = Current Liabilities + Non-Current Liabilities
Q: Comment on the movements in the ratios over two years and adequacy of the level of gearing and…
A: Financial ratios refers to the ratios which determine the line items of the financial items of the…
Q: An analysis of TANG Co.'s liabilities on December 31, 2020 disclosed the following information:…
A: A statement of financial position can be defined as a statement that provides a summary of the…
Q: The adjusted trial balance for Lifesaver Corp. at the end of the Current year, 2020, contained the…
A: Non-current liabilities are those which are not payable within a period of twelve months. It…
Q: In the course of your examination of the accounts of Toledo, Inc. you obtain the following…
A: Unamortized bond premium is the difference between the bond value (less of interest) and the…
Q: Amasan Corp. reported the following liabilities on December 31,2020 Accounts Payable 750,000…
A: Current liabilities are the payments that a company has to pay to others within a year.
Q: In the audit of Atlanta Corporation’s financial statements at December 31, 2025, the chief…
A: Non-current liabilities are liabilities that are due after a year or more whereas current…
Q: t December 31, 2020, Martinez Corporation has the following account balances: Bonds payable, due…
A: Bonds payable: Bonds payable is a liability to the company created upon the issue of bonds either at…
Q: Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some…
A: Current portion of securities=$112,0002=$56,000
Q: You are in charge of auditing PLM (PopoyLangMalakas) Company's investment accounts for the year…
A: Retained earnings refer to the amount that is being kept aside after payment of interest and…
Q: yield investors 10%. Moonlight Bay records interest at the effective rate. At December 31, 2020,…
A: Interest expense refers to the expenses born by an entity for borrowing some money or loan.
Q: In the audit of Atlanta Corporation’s financial statements at December 31, 2025, the chief…
A: An obligation that is owed by individual or organization usually including cash is termed as…
Q: Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some…
A: Balance Sheet: It is a financial statement prepared at the point of time to evaluate the financial…
The chief accountant of KYB Ltd has prepared and presented the following schedule for long term debt for the audit of financial statements for the year ended March 31, 2020:
|
Notes Payable Description |
Interest Rates |
Maturity Date |
Opening Balance |
Additions |
Payments to date |
Closing Balance |
|
Mortgage Payable |
4.5% |
2050 |
2,415,886 |
172,757 |
|
2,588,643 |
|
Unsecured Notes Payable |
5.5% |
2030 |
5,879,800 |
|
850,000 |
5,029,800 |
|
Secured Bonds |
5.75% |
2021 |
6,228,000 |
1,272,000 |
|
7,500,000 |
|
Convertibles Debentures |
3.5% |
2025 |
|
3,500,000 |
|
3,500,00 |
|
Total |
|
|
14,520,686 |
4,944,757 |
850,000 |
18,615,443 |
|
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Required:
Describe substantive procedures the auditor should perform to confirm the transactions in the schedule above for the year-end.
Step by step
Solved in 2 steps
- Debt Management Ratios Glow Corporation provides annual and quarterly financial data to the public. For the years of 2018 and 2019. Glows financial data included the following account balances: Required: Determine whether the debt to equity ratio is increasing or decreasing and whether Glow should be concerned.Noren Company uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Noren Company considers changing the past-due categories as follows. A. Complete each table by filling in the blanks. B. Determine the difference between totals uncollectible. C. Complete the following 2019 comparative income statements for 2019, showing net income changes as a result of the changes to the balance sheet aging method categories. D. Describe the categories change effect on net income and accounts receivable.Elegant Linens uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more favorably, Elegant Linens considers changing the past-due categories as follows. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Complete the following 2019 comparative income statements for 2019, showing net income changes as a result of the changes to the balance sheet aging method categories. D. Describe the categories change effect on net income and accounts receivable.
- In connection to your audit of James Bond Company for the year ended December 31, 2020, you noted the following liability accounts: 10%, 10-year, ₱1,000 Serial bonds payable, dated January 2, 2020 ₱10,000,000 Accrued interest payable 1,150,000 Deferred tax liability 552,000 Notes payable 2,000,000 In addition, you obtained corroborative evidences to validate the balances of the above-mentioned accounts and revealed the following: The company’s bonds were all issued on January 2, 2020. Interest is to be paid annually in arrears. Also, the bond indenture calls the issuer to pay equal annual installments on the principal of the bonds over 5 years which will start on January 2, 2026. The market rate of interest of similar instruments upon issuance of the bonds is at 12%. Based on the provided schedule, the company recorded the issued bonds at face amount and did not recognize any discount/premium. You understood that the notes payable account consists of:…You are now in the completion stage of your audit of the financial statements of Endgame Inc. for the period ended December 31, 2021. In relation to this, you reviewed relevant subsequent events up to April 15, 2022, the date financial statements were approved for issuance by Endgame Inc's Board of Directors. The following information are deemed relevant as a result of your review: A. The company has a 10%, P2 million Notes Payable due on March 31, 2024. A debt covenant requires Endgame Inc. to maintain current assets at least equal to 150% of its current liabilities. On December 31, 2021, however, Endgame Inc. is in violation of this covenant. On December 31, 2021, Endgame, obtained a grace period for another year, that is up to December 31, 2022, from Avenger Bank, having convinced the bank that the company's normal current ratio of 2:1 will be reestablished by the end of the year. B. The company has another P5 million, 5-year, non-cancelable 13% bonds issued at face value on March…You are now in the completion stage of your audit of the financial statements of Endgame Inc. for the period ended December 31, 2021. In relation to this, you reviewed relevant subsequent events up to April 15, 2022, the date financial statements were approved for issuance by Endgame inc's Board of Directors. The following information are deemed relevant as a result of your review. A. The company has a 10%, P2 million Notes Payable due on March 31, 2024. A debt covenant requires Endgame Inc. to maintain current assets at least equal to 150% of its current liabilities. On December 31, 2021, however, Endgame Inc. is in violation of this covenant. On December 31, 2021. Endgame obtained a grace period for another year, that is up to December 31, 2022, from Avenger Bank, having convinced the bank that the company's normal current ratio of 2:1 will be reestablished by the end of the year. B. The company has another P5 million, 5-year, non-cancelable 13% bonds issued at face value on March…
- You are now in the completion stage of your audit of the financial statements of Endgame Inc. for the period ended December 31, 2021. In relation to this, you reviewed relevant subsequent events up to April 15, 2022, the date financial statements were approved for issuance by Endgame Inc.'s Board of Directors. The following information are deemed relevant as a result of your review: A The company has a 10%, P2 million Notes Payable due on March 31, 2024. A debt covenant requires Endgame Inc. to maintain current assets at least equal to 150% of its current liabilities. On December 31, 2021, however, Endgame Inc. is in violation of this covenant. On December 31, 2021, Endgame. obtained a grace period for another year, that is up to December 31, 2022, from Avenger Bank, having convinced the bank that the company's normal current ratio of 2:1 will be reestablished by the end of the year. B. The company has another P5 million, 5-year, non-cancelable 13% bonds issued at face value on March…The comparative balance sheets for Metlock Corporation show the following information. December 312020 2019Cash $33,500 $12,900Accounts receivable 12,400 10,000Inventory 12,100 9,000Available-for-sale debt investments –0– 3,000Buildings –0– 29,800Equipment 44,800 19,900Patents 5,000 6,300 $107,800 $90,900Allowance for doubtful accounts $3,100 $4,500Accumulated depreciation—equipment 2,000 4,500Accumulated depreciation—building –0– 6,000Accounts payable 5,000 3,000Dividends payable –0– 4,900Notes payable, short-term (nontrade) 3,000 4,100Long-term notes payable 31,000 25,000Common stock 43,000 33,000Retained earnings 20,700 5,900 $107,800 $90,900 Additional data related to 2020 are as follows. 1. Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,500.2. $10,000 of the long-term note payable was paid by issuing common stock.3. Cash dividends paid were $4,900.4. On January…Whispering Company uses the LIFO method for financial reporting purposes but FIFO for internal reporting purposes. At January 1, 2020, the LIFO reserve has a credit balance of $1,186,900. At December 31, 2020, Whispering’s internal reports indicated that the FIFO inventory balance was $2,717,300 and for external reporting purposes the LIFO inventory balance was $1,434,000. (a) What is the amount of the LIFO reserve and the LIFO effect related to 2020? LIFO reserve at December 31, 2020 $enter a dollar amount LIFO effect for 2020
- Tamarisk Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amoortization cost $52,100 Fair Value 44,200 Expected credit losses 12,850 What is the amount of the credit loss that Tamarisk should report on this available-for-sale security at December 31, 2020? Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. Assume that the fair value of the available-for-sale security is $57,200 at December 31, 2020, instead of $44,200. What is the amount of the credit loss that Tamarisk should report at December 31, 2020? Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.Star, Inc. is a manufacturer and retailer of household furniture. Your audit of the company's financial statements for the year ended December 31, 2018, discloses the following debt obligations of the company at the end of its reporting period. Star's financial statements are authorized for issuance on March 6, 2019. A P150,000 short-term obligation due on March 1, 2019. Its maturity could be extended to March 1, 2021 provided Star agrees to provide additional collateral. On February 12, 2019, an agreement is reached to extend the loan's maturity to March 1, 2021. A short-term obligation of P3,600,000 in the form of notes payable due February 5, 2019. The company issued 75,000 ordinary shares for P36 per share on January 25, 2019. The proceeds from the issuance, plus P900,000 cash, were used to fully settle the debt on February 5, 2019. A long-term obligation of P2,500,000 due December 1, 2028. On November 10, 2018, Star breaches a covenant on its debt obligation and the loan…In your audit of Pink Corporation’s liabilities accounts in relation to the company’s financial statements audit for the period ended December 31, 2020, an excerpt of the company’s unadjusted trial balance showed the following information: Accounts payable, net of a P12,000 debit balance P399,000 Accrued expenses 17,400 Provision for warranties 276,375 12% Notes payable, Bank due December 31, 2023 500,000 Audit notes: (A) Purchases cut-off procedure information: December Purchases Journal Entries RR Number Receiving Report Date Amount Particulars 82101 Dec. 26, 2020 P12,900 FOB Destination 82102 Dec. 28, 2020 15,200 FOB Shipping Point 82103 Dec. 29, 2020 11,900 On consignment 82105 Dec. 31, 2020 9,500 FOB Destination 82106 Jan. 2, 2021 13,200 Goods in transit; FOB Buyer 82107 Jan. 3, 2021 8,900 Goods in transit; FOB Shipping Point January Purchases…
