Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 11, Problem 7CP
a.
To determine
State the major business units of Incorporation R.
b.
To determine
Explain the reason for Incorporation R requiring so many pages of contingency liabilities.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
(Disclosures, Conditional and Contingent Liabilities) Presented below are three independent situations.Situation 1: A company offers a one-year warranty for the product that it manufactures. A history of warranty claims has been compiled, and the probable amounts of claims related to sales for a given period can be determined.Situation 2: Subsequent to the date of a set of financial statements but prior to the issuance of the financial statements, a company enters into a contract that will probably result in a significant loss to the company. The amount of the loss can be reasonably estimated.Situation 3: A company has adopted a policy of recording self-insurance for any possible losses resulting from injury to others by the company’s vehicles. The premium for an insurance policy for the same risk from an independent insurance company would have an annual cost of $4,000. During the period covered by the financial statements, there were no accidents involving the company’s vehicles that…
(a.) Prepare any journal entries you consider necessary, including year end entries (December 31), assuming these investments are managed to profit from changes in market interest rates (held for trading). Mayor Company doesn’t have debt investment before 2020.
(b.) Prepare a partial statement of financial position showing the Investment account at December 31, 2020.
(c.) If Mayor Company purchase the debt investment to collect the contractual cash flow (held the debt investment to maturity), explain how the journal entries would differ from those in part (a).
Additional information the attached documents
Inventories as at 31 December 2020 amounted to R185000.
All purchases and sales are on credit
Credit terms to Debtors are on 30 days
Credit terms of 3/10 net 90 days are granted by creditors
Dividends for the year amounted to R139503.
Questions based on the above information and the attachments:
Will the company be able to find its short-term obligations if inventories are not sold?, please explain.
The directors are considering financing the expansion of the company by taking a long term loan. With the use of the relevant ratios advise whether this would be appropriate for the company.
Comment on the dividend payout rate of the company.
Calculate the cost (as a percentage) to Satner Limited of not accepting discounts in settlement accounts.
As a shareholder would you be satisfied with the profitability of the company? please explain
Is the company's collection policy effective? Please explain
Chapter 11 Solutions
Financial Accounting
Ch. 11 - Does a discounted note payable provide credit...Ch. 11 - Employees are subject to taxes withheld from their...Ch. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - When should the liability associated with a...Ch. 11 - Prob. 10DQ
Ch. 11 - Proceeds from notes payable On May 15, Maynard Co....Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Prob. 2PEACh. 11 - Prob. 2PEBCh. 11 - Prob. 3PEACh. 11 - Prob. 3PEBCh. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Prob. 6PEACh. 11 - Prob. 6PEBCh. 11 - Prob. 7PEACh. 11 - Prob. 7PEBCh. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Current liabilities Bon Nebo Co. sold 25,000...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Entries for discounting notes payable Ramsey...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - Entries for discounted note payable A business...Ch. 11 - Entries for notes payable Bull City Industries is...Ch. 11 - Prob. 8ECh. 11 - Calculate payroll An employee earns 25 per hour...Ch. 11 - Prob. 10ECh. 11 - Summary payroll data In the following summary of...Ch. 11 - Payroll tax entries According to a summary of the...Ch. 11 - Payroll entries The payroll register for Gamble...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Accrued vacation pay A business provides its...Ch. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Accrued product warranty General Motors...Ch. 11 - Prob. 22ECh. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - Prob. 24ECh. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data on employer FICA tax...Ch. 11 - Prob. 4PACh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 1PBCh. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data and employer FICA tax...Ch. 11 - Prob. 4PBCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 3CPPCh. 11 - Ethics in Action Tonya Latirno is a staff...Ch. 11 - Prob. 2CPCh. 11 - Communication WBM Motorworks is a manufacturer of...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Prob. 7CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Current Liabilities The following items are accounts on Smiths balance sheet of December 31, 2016: Required Identify which of the accounts should be classified as a current liability on Smiths balance sheet. For each item that is not a current liability, indicate the category of the balance sheet in which it would be classified. Assume the company has the following balance sheet categories: current asset; property, plant, and equipment; long-term investment; intangible asset; current liability; long-term liability; and stockholders equity.arrow_forwardReporting Liabilities Morton Electronics had the following obligations: a. A legally enforceable claim against the business to be paid in 3 months. b. A guarantee given by a seller to a purchaser to repair or replace defective goods during the first 6 months following a sale. c. An amount payable to Bank One in 10 years. d. An amount to be paid next year to Citibank on a long-term note payable. Required: CONCEPTIJAL CONNECTION Describe how each of these items should be reported in the balance sheet.arrow_forwardComparative Analysis: Under Armour, Inc., versus Columbia Sportswear Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com. Required: Are debt and equity likely to be available as inflows of cash in the near future?arrow_forward
- Contingent Liabilities Many companies provide warranties with their products. Such warranties typically guarantee the repair or replacement of defective goods for some specified period of time following the sale. Required: CONCEPTUAL CONNECTION Why do most warranties require companies to make a journal entry to record a liability for future warranty costs?arrow_forwardMarigold 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. Amortized cost $51,100 Fair value 42,200 Expected credit losses 12,600 A. What is the amount of credit loss that marigold should report on this available-for-sale security at december 31, 2020? Amount of the credit loss $ 8,900 B. Prepare the journal entry to record the credit loss, if any ( and other adjustments needed), at December 31, 2020? date account titles and explanations debit credit 12/31/20 8,900 8,900 Please note that the answer is NOT Debit Loss on available for sale debt securities and Credit avilable for sale debt securities. These are the account titles I can choose from... Accumulated Other…arrow_forward9. Which of the following items would be excluded from current liabilities? Group of answer choices a. Normal accounts payable which had been assigned by the creditor to a finance company. b. Long-term debt callable within one year or less because the debtor violated a debt provision. c. A short-term debt which at the discretion of the entity can be rolled over at least twelve months after the balance sheet date. d. A long-term liability callable or due on demand by the creditor even though the creditor have given no indication that the debt will be called.arrow_forward
- Reffering to the below sheet 1) What is the current portion of long-term liabilities and for what type of liabilities? 2) How company is taking tax advantage of Bonds Payable (or any other fixed cost financing)?arrow_forwardCarla 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. Amortized cost $50,300 Fair value 40,600 Expected credit losses 12,200 (a) What is the amount of the credit loss that Carla should report on this available-for-sale security at December 31, 2020? Amount of the credit loss $arrow_forwardNegotiable certificates of deposita) are bearer instruments because their holders earn the interest and principal at maturity.b) typically have a maturity of one to four months.c) are usually denominated at $100,000.d) are all of the above.e) are only A and B of the above.arrow_forward
- A debtor firm’s 12/31/21 statement of financial position is to be issued of 4/15/22. A long-term obligation contracted in 2019 for settlement on 1/15/22 was extinguished through cash payment on its due date. On 1/20/22, a 5-year note was issued to replace the cash used up for the payment made on 1/15/22. Which of the following statements is correct? Group of answer choices The original obligation should be reported in the 2021 statement of financial position as a current liability because the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. The new obligation entered into on 1/20/22 should be reported in the 2022 statement of financial position as a non-current liability because it is due to be settled beyond twelve months after the reporting period. The original obligation should be reported in the 2022 statement of financial position as a non-current liability because the entity does have an…arrow_forwardHow much should Cicamore report as current liabilities in its December 31,2022 statement of financial position.arrow_forwardThe following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1, 2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securities that is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be held until their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costing P29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, and treasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bond retirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage LearningSurvey of Accounting (Accounting I)AccountingISBN:9781305961883Author:Carl WarrenPublisher:Cengage Learning
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningIntermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:9781305961883
Author:Carl Warren
Publisher:Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning