AUDIT OF LONG-TERM LIABILITIES

PROBLEM 1
1. Premium
2. Interest expense June 30 2019 P31, 884
3. Interest expense Dec. 31 2019 P31, 791
4. Cv July 1 2020 P1, 053, 179
5. Maturity value plus the unamortized portion of the premium

PROBLEM 2
1. Cash 522, 500
Bonds Payable 500, 000
Premium on Bonds payable 22, 500

2. Interest expense 37, 500

Interest payable 37, 500

3. Interest payable 37, 500

Interest expense 37, 500

4. Interest expense 37, 500

Cash 37, 500

5. Interest payable 30, 000

Interest expense 30, 000

6. Premium on bonds payable 2, 500

Interest Expense 2, 500

7. Premium on bonds payable 4, 815

Interest expense 2, 375
Retained earnings 2, 500

8. Interest expense 3, 750

Bonds payable 100, 000
Premium on bonds payable 3, 625
Loss on retirement 1, 625
Cash 109, 000

PROBLEM 3
1. CV Dec. 31 2019 P4, 832,720
2. CV Dec. 31 2020 P4, 868,451
3. Interest expense Dec. 31 2020 P435, 731
4. CV Bonds converted P2, 443,765
5. APIC P1, 693,766
6. CV retired bonds P2, 443,765
7. Loss on retirement P156, 235
8. Interest expense Dec. 31 2021 P219, 080
9. No gain or loss on conversion

PROBLEM 4
1. P400
2. P1, 392
3. P691, 264
4. P40, 000
5. P2, 697
6. P11, 600

PROBLEM 5
1. P2, 000
2. P158, 000
AUDIT OF LIABILITIES

PROBLEM 1
1. P13, 475

PROBLEM 2
P28, 000

PROBLEM 3
1. Understated by P516, 940
2. Accounts payable 180, 000
Loans payable 100, 000
Interest payable 80, 000

3. Accounts payable 50, 000

Accounts payable-others 50, 000

4. Ubderstated by P200, 000

PROBLEM 4
1. C no adjustment or disclosure
2. A adjusted and disclosed
3. A adjusted and disclosed
4. B only disclosure is required
5. C no adjustment or disclosure
6. A only disclosure is required
7. B only disclosure is required
8. A adjusted and disclosed
9. B only disclosure is required
10. A adjusted and disclosed

PROBLEM 5
1. Notes payable 3, 000,000
Common stock 1, 200,00
APIC 1, 800,000

2. Notes payable 3, 000,000

Land 2, 000,000
Gain on exchange 500, 000
Gain on debt restructuring 500, 000

3. No adjustment
4. Notes payable-old 3, 000,000
Notes payable-new 2, 400,000
Gain on debt restructuring 600, 000
PROBLEM 6
1. P190, 000
2. P50, 000

PROBLEM 7
1. Estimated warranty payable P345, 000
2. Unamortized bond discount P90, 000
3. Bond interest payable P30, 000
4. Total current liability P5, 445,000
5. Total non-current liability P7, 610,000
AUDIT OF INVESTMENT
PROBLEM 1
1. Unrealized holding gains P55, 000
2. Unrealized loss P20, 000

PROBLEM 2
1. Loss P0
2. Net realized loss P120, 000

PROBLEM 3
1. Investment-common stocl 49, 000
Investment-preferred stock 49, 000

2. Investment -common stock 16, 200

Dividend Income 16, 200

3. P6, 473
4. P1, 244
5. P4, 580
6. P139, 796
7. P3, 960 rights
8. P5, 557

PROBLEM 3
1. P126, 500
2. P140, 000
3. P2, 288,500
4. P0
5. P4, 125
6. P2, 800
7. Credited to unrealized loss on market decline
8. Debit to dividend income