PROBLEM NO.

1 - Lakers Corporation
1 Warranty payable, 3/31/19 252,000
Add warranty expense accrued during 2019-2020 630,000
Total 882,000
Less payments during 2019-2020 537,000
Warranty payable, 3/31/20 345,000 B
2 Bond discount, 10/1/14 (P5,000,000 x .04) 200,000
Discount amortization, 10/1/14 to 3/31/20 (P200,000/10 x 5.5) (110,000)
Bond discount, 3/31/20 90,000 D

3 Bond interest payable, 10/1/19 to 3/31/20 (P5,000,000 x 12% x 6/12) 300,000 B

4 Notes payable - current (maturing up to 3/31/21) 2,400,000
Accounts payable 560,000
Estimated warranty payable (see no. 1) 345,000
Cash dividends payable (5 million shares x P0.30) 1,500,000
Accrued interest:
Notes payable 340,000
Bonds payable (see no. 3) 300,000 640,000
Total current liabilities 5,445,000 C

5 Bonds payable:
Face value 5,000,000
Unamortized bond discount (see no. 2) (90,000) 4,910,000
Notes payable - non current 2,700,000
Total non current liabilities 7,610,000 D

PROBLEM NO. 2 - Luffy's Music Emporium

Question No. 1 - A
Warranty expense (P5,400,000 x 2%) 108,000

Question No. 2 - D
Estimated liability from warranties, 1/1/20 136,000
Add warranty expense for 2005 108,000
Total 244,000
Less actual expenditures for 2020 164,000
Estimated liability from warranties, 12/31/20 80,000

Question No. 3 - A
Premium expense [(1,800,000 x 60%)/200 x P14] 75,600

Question No. 4 - D
Inventory of premium, 1/1/20 39,950
Add premium purchases (6,500 x P34) 221,000
Total premium available 260,950
Less premiums issued (1,200,000/200 x P34) 204,000
Inventory of premium, 12/31/20 56,950

Question No. 5 - C
Estimated premium claims outstanding, 1/1/20 44,800
Add premium expense for 2020 75,600
Total 120,400
Less premiums issued (1,200,000/200 x P14) 84,000
Estimated premium claims outstanding, 12/31/20 36,400