1.

D "each point as likely as any others"

2. D A,B,C are accrual approach
3. C Sold 200000
Estimate minor defect 15% Provision for minor defect 3000000
Estimate major defect 10% Provision for major defect 6000000
Cost minor defect 100 TOTAL 9000000
Cost major defect 300
4. C Current year warranty expense 1900000
Warranty liability acc decrease 200000
ACTUAL WARRANTY COST 2100000
5. B A - "creditor"
C - "in upcoming year"
6. B Cash xxx
Unearned revenue xxx
7. A Bonus 10% B=10%(NI-T)
Net income 100000 B= 10% (100000-T) T= 30% (NI-B)
Tax rate 30% B= 10% (100000-30000-30%B) T= 30% (10000-B)
B= 10000 - 3000 +3%B
.97B = 7000
B = 7216.49 7216.49-10000-30%
64948.45
8. A "provision is disclosed"
9. B 2022 2023
10. C Sales 4200000 Allocation Sales
11. C Points 40000 Sales 4200000 3585366 Points
SSP/ pts 20 Points 720000 614634.1 SSP/ pts
Estimated redemption 720000 4920000 4200000 Estimated redemption
Estimate % 2022 90% Estimate % 2023
Estimate % 2023 85% Income Balance Sales Estiamte 2024
Estiamte 2024 95% 2022 245853.7 368780.5 3831219.5 Est. pts 2023
Est. pts 2022 36000 2023 122926.8 245853.7 Est. pts 2024
Est. pts 2023 34000 2024 61463.41 553170.7 Redeemed 2023
Est. pts 2024 38000 Redeemed 2024
Redeemed 2022 14400 0.4
Redeemed 2023 6000 0.6
Redeemed 2024 6200 0.7
12. D

13. C Pension Liability 2500000

Loan 1 4000000
Loan 2 5000000
Loan 3 9000000
 TOTAL NCL 20500000
14. B Loan Term Interest Matuirty Interest
Nov 1, 20221yr 300000 12% Oct. 31,2023 0.83 36000
Feb. 1, 20236 mos 900000 12% July 31,2023 0.5 54000
April 4, 20231 yr 480000 12% March 31,2024 0.75 57600

15. B Estimate loss between 500000 1000000

Midpoint 750000
16. C "Warranty shall be recognized when an entity estimates warranty cost"
17. C Initial payments 99000
Sept - Dec (earned) 4 mos
Unearned 8 mos 66000
18. B Major defect 3%
Minor defect 5%
Cost major defect 5000000 150000
Cost minor defect 3000000 150000
Warranty Provision 300000
19. C Sold 160000 Premium Cost 10
20. A Premiums 12000 Distribution Cost 2.5
Coupons redemed 40000 Cost per premium 12.5
Estimate 60%
coupons to present 5

21. D Accounts Payable net of 22,500 105000 22500

Accrued Expenses 15000
Credit Balance AR 13500
Est. Liabilities 60000
Total current Liabilties 216000
22. Bonus pero A
23. D one year loan, July 1, 2023 can be refinanced but subject to approval
24. B Deferred revenue
25. B

3 yr warranty Balance 2023 2024

26. B Jan. 1, 2023 432000 144000 288000 Net income Jan. 1,2024 648000
27. B July 1, 2023 720000 120000 600000 189000 440000 April 1,2024 1080000
Oct. 1, 2023 900000 75000 825000 Aug 1,2024 864000
2052000 339000 1713000 2592000
Actual repair 2023 2024
150000 220000
28. A III. "mere assurance"
IV. IFRS15
29. A
30. C Sales 8000000
No. of FG 15000 Selling price 3000000 Sales 8000000
Pairs need 8 Est. 2000000 Free product 2000000
 Estimate 0.67 15000*200*0.67 10000000
Redeemed 6500
Price of FG 200
31. C
Beg. Deposits Containers Returned Ending
2020 150000 (expired) 2020 90000 (expired)
2021 430000 2021 250000
Deposits for 2022 780000 2022 286000
1210000 536000 674000

32. B
33. C
34. C 2023 2024 Breakage
Gift Certificates sold 9000000 7000000 Redeemed
Redeemed 95% Expected to be redeemed
2023 3420000 2137500 5% Expected breakage
2024 2992500
35. B Beg.2023 9000000 Beg.2024 5580000
Redeemed -3420000 Sold 7000000
Ending 5580000 Redeemed -2137500
-2992500
Breakage -270000
7180000
T= 30% (NI-B) T= 30000-30%B
T= 30% (10000-B)

2024
4462500 Allocation Sales 5180000
50000 Sales 4462500 3904687.5 Points 42000
15 Points 637500 557812.5 SSP/ pts 10
Estimated redemption 637500 5100000 4462500 Estimated redemption 420000
Estimate % 2023 85% Estiamte 2024 95%
Estiamte 2024 95% Income Balance Sales Est. pts 2024 39900
Est. pts 2023 42500 2023 167343.8 636322.40854 4072031 Redeemed 2024 5985
Est. pts 2024 47500 2024 83671.88 474140.625
Redeemed 2023 12750 0.3
Redeemed 2024 8625 0.45
 2023, int exp
30000 36000
54000 54000
43200
127200 90000 37200

Estimated to be redeemed 96000 19200

Estimated coupons 19200 8000
Premium Exp 240000 11200
Ending 140000

term Balance
216000 432000
324000 756000
120000 744000
660000 1932000

Allocation Redemption
6400000 15000*067 10050
1600000 6500/10050*1600000 1040000
 8000000

2024
5130000 Redeemed/Expected to be redeemed*Expected breakage
be redeemed 6650000 270000
350000
 Allocation
Sales 5180000 4791500
Points 420000 388500
5600000 5180000

Income Balance Sales

0.15 2024 58275 1357536 4849775
PROBLEM 5
Accounts Payable (net of 100,000 debit balance) 4000000 100000
Accrued Expenses 1500000
Credit balance of customer account 500000
Estimated expenses in redememing prize coupons 600000
ANSWER A CURRENT LIABILITY 6700000
PROBLEM 6
Income taxes withheld from empolyees 900000
Cash overdraft 1300000
AR w/ credit balance 750000
Estimated expenses of meeting warranties 500000
Estimated damages 1500000
Accounts Payable 3000000
Serial bonds 5000000 12% 150000
ANSWER B 8100000
PROBLEM 7
December 31,2022
12% Notes Payable maturing on March 1,2023 5000000 CL
(refinanced on January 31,2023)
10% Notes Payable maturing on October 1,2023 3000000 NCL
(entity has right to defer settlement)
ANSWER B
PROBLEM 8
Accounts Payable 1000000 CL
12% Notes Payable 2000000 NCL
(noncancelable agreement to refinance ong long-term)
10% Notes Payable 1400000 NCL
(entity has right to roll over)
10% debentures payable annual installemnt of 500000 7000000 Partly CL
ANSWER B 1500000
PROBLEM 9
EFFECTIVE INTEREST METHOD