(a)
Liability
Liability is an obligation of the business to pay to the creditors in future for the goods and services purchased on account or any for other financial benefit received. It can be current liability or a non-current liability depending upon the time period in which it is paid.
Current liability
Current liability is an obligation that the companies need to pay from the remaining current assets or creation of other current liabilities within a fiscal year or the operating cycle whichever is higher.
Notes payable
Notes Payable is a written promise to pay a certain amount on a future date, with certain percentage of interest. Companies use to issue notes payable to meet short-term financing needs.
International Financial Reporting Standards:
They are commonly known as IFRS. It is a set of accounting standards which are developed by independent (Non-profit) organization called as International Accounting Standards Board (IASB). It is universally accepted set of standards which states the rules and practice for accounting practice.
To Identify: The total current liabilities for the Company LV as on December 31, 2014.
(b)
To Identify: The Composition of long-term gross borrowings according to financial statement notes on December 31, 2014.
(c)
To Ascertain: How borrowings are measured, according to the accounting policy of financial statement notes.
(d)
The fixed rate and adjustable rate of borrowings of Company LV on December 31, 2014.
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Chapter 10 Solutions
FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
- s of Placeless Wireless include the following as of December 31, 2024: ew the accounting records.) es on th Wireles ese lia Data table Accounts Payable Mortgages Payable (long-term) Interest Payable Bonds Payable (long-term) Total Stockholders' Equity $ 76,000 80,000 22,000 61,000 150,000 Print Salaries Payable Bonds Payable (current portion) Premium on Bonds Payable Uneamed Revenue (short-term) Done $ B 7,000 21,000 11,000 2,800 Xarrow_forwardHeinz Company’s post-closing trial balance as of December 31, 2018, and the adjusted trial balance as of December 31, 2019, are shown here: A review of the accounting records reveals the following additional information: a. Bonds payable with a face value, book value, and market value of $14,000 were retired On June 30, 2019. b. Bonds payable with a face value of $8,000 were issued at 90.25 On August 1, 2019. They mature on August 1, 2024. The company uses the straight-line method to amortize the bond discount. c. The company sold a building that had an original cost of $8,000 and a book value of $4,800. The company received $2,200 in cash for the building and recorded a loss of $2,600. d. Equipment with a cost of $4,000 and a book value of $1,400 was exchanged for an acre of land valued at $2,700. No cash was exchanged. e.…arrow_forwardPrime Corporation prepared its annual financial statements for its shareholders for the fiscal year ending December 31, 2029. Record whether the transaction below for Prime Corporation overstated (O), understated (U), or correctly stated (C) total assets, total liabilities, stockholders' equity, and net income in 2029. You must write "O", "U", or "C" in each blank for credit. Prime Corp. did not adjust its unearned revenue account for the $8,000 of revenue earned in December 2029. Assets: O/U/C? Liabilities: O/U/C? Equity: O/U/C? Net income: O/U/C?arrow_forward
- The following selected transactions relate to contingencies of Classical Tool Makers, Inc., which began operationsin July 2018. Classical’s fiscal year ends on December 31. Financial statements are issued in April 2019.Required:Prepare the year-end entries for any amounts that should be recorded as a result of each of these contingencies andindicate whether a disclosure note is indicated.1. Classical’s products carry a one-year warranty against manufacturer’s defects. Based on previous experience,warranty costs are expected to approximate 4% of sales. Sales were $2 million (all credit) for 2018. Actualwarranty expenditures were $30,800 and were recorded as warranty expense when incurred.2. Although no customer accounts have been shown to be uncollectible, Classical estimates that 2% of creditsales will eventually prove uncollectible.3. In December 2018, the state of Tennessee filed suit against Classical, seeking penalties for violations of cleanair laws. On January 23, 2019, Classical…arrow_forwardLocate Gap Inc.’s 2020 Annual Report (for fiscal year 2/2/20-1/30/21) There are 10 sections of questions. You will find the information necessary to answer the questions in “Item 8. Financial Statements and Supplementary Data,” of the report. Read through the questions carefully and answer in the space provided. What are the following amounts at 1/30/21: Total Assets : Total Liabilities: Total Owner’s Equity : At 1/30/21: What is the percentage of debt used to finance Gap? What is the percentage of owner’s equity used to finance Gap? What is the significance of these two percentages?arrow_forwardSport Enterprises have individual accounts for their debtors in a debtors subsidiary ledger and have a debtors control account in the general ledger. The balance of the debtors control account at 1 May 2021 is R169 200. The following information was provided for the month ending 31 May 2021: 1. Journals provided the following totals for relevant transactions: For the month ended 31 May 2021 R Sales journal: Debtors columnSales returns journalCash receipts journal: Debtors columnGeneral Journal: Interest charged on overdue debtors’ accountsGeneral Journal: Debtors balances written off as irrecoverable 762 0006 300586 8002 1002 700 2. The debtors ledger clerk submitted the following : List of debtors balances as at 31 May 2021 – debit balances R C GaleH BoltG HuntI KhuneR Nadal 31 500132 300182 70018 9009 000 3. Additional information to be taken into account (not included in the above): 3.1 No entry has been made for a credit sale of…arrow_forward
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- A company's accounts payable dated December 31, 2021, totaled P1,000,000 before any necessary year-end adjustments relating to the following transactions and information: On December 27, 2021, the company wrote and issued checks to creditors totaling P350,000. The issuance of the checks was recorded on January 3, 2022. On December 28, 2021, the company purchased and received goods for P150,000, terms 2/10, n/30. The company records purchases and accounts payable at net amounts. The invoice was recorded and paid on January 3, 2022 • Goods shipped FOB Destination on December 20, 2021, from a vendor to the company were received on January 2. 2022. The invoice cost was P65,000. The purchase was recorded on January 2, 2022. • Goods costing P120,000 were purchased from supplier with terms FOB shipping point on December 28, 2021. The company received the goods and the invoice on January 4, 2022. The P1,000,000 ledger balance of accounts payable is net of P80,000 debit balance in one…arrow_forwardA company's accounts payable dated December 31, 2021, totaled P1.000,000 before any necessary year end adjustments relating to the following transactions and information: • On December 27, 2021. the company wrote and issued checks to creditors totaling P350.000. The issuance of the checks was recorded on January 3, 2022. • On December 28. 2021, the company purchased and received goods for P150.000, terms 2/10. n/30. The company records purchases and accounts payable at net amounts. The invoice was recorded and paid on January 3. 2022 • Goods shipped FOB Destination on December 20, 2021. from a vendor to the company were received on January 2. 2022. The invoice cost was P65,000. The purchase was recorded on January 2, 2022. • Goods costing P120.000 were purchased from supplier with terms FOB shipping point on December 28, 2021. The company received the goods and the invoice on January 4, 2022. • The P1.000,000 ledger balance of accounts payable is net of P80.000 debit balance in one…arrow_forwardPhoebe Corporation signed a six-month note payable on October 23, 2018. What accountsrelating to the note payable will be reported on its financial statements for the fiscal yearending December 31, 2018?a. Notes payable and interest payable will be reported on the balance sheet.b. Notes payable will be reported on the balance sheet and interest payable will be reportedon the income statement.c. Notes payable, interest payable, and interest expense will be reported on the balancesheet.d. Interest receivable will be reported on the balance sheet and notes payable will bereported on the income statement.arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
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