Professional Documents
Culture Documents
Current Liabilities
PROBLEM 1: TRUE OR FALSE
1 TRUE 6 TRUE
2 TRUE 7 FALSE
3 FALSE 8 TRUE
4 FALSE 9 FALSE
5 FALSE 10 TRUE
PROBLEM 2: MULTIPLE CHOICE – THEORY
1 A 6 C
2 D 7 D
3 C 8 A
4 D 9 B
5 D 10 D
PROBLEM 3: MULTIPLE CHOICE – COMPUTATIONAL
1 D 6 B 11 D
2 B 7 C 12 B
3 D 8 B 13 A
4 C 9 C 14 D
5 A 10 D 15 C
PROBLEM 4: FOR CLASSROOM DISCUSSION
1. Solution:
Total financial liabilities 140,000
2. Solution:
Current liabilities 3,600,000
3. Solution:
Total current liabilities 30,000,000
4. Solution:
Adjusted accounts payable 1,190,000
5. Solution:
➢ Subscriptions revenue in 20x2: (160,000 + 2,690,000) = 2,850,000
➢ Unearned subscriptions as of 12/31/x2 = 110,000
6. Solution:
Date Cash 400,000
Gift card liability 400,000
Date Gift card liability 216,000
Revenue 216,000
Date Gift card liability 24,000
Revenue (400,000 x 10% x 60%*) 24,000
7. Solution:
Adjusted total current liabilities 5,550,000
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Notes Payable
PROBLEM 1: TRUE OR FALSE
1 TRUE 6 FALSE
2 FALSE 7 TRUE
3 FALSE 8 TRUE
4 TRUE 9 FALSE
5 FALSE 10 TRUE
PROBLEM 2: MULTIPLE CHOICE – THEORY
1 C 6 A
2 C 7 B
3 D 8 D
4 D 9 D
5 C 10 C
PROBLEM 4: MULTIPLE CHOICE – COMPUTATIONAL
1 A 6 C
2 A 7 B
3 D 8 B
4 C 9 C
5 B 10 C
Bonds Payable & Other Concepts
Requirement (d):
1/1/x1
Cash 4,800,000
Discount on bonds payable 200,000
Bonds payable 5,000,000
1/1/x1
Discount on bonds payable (Bond issue costs) 473,767
Cash 473,767
12/31/x1
Interest expense 692,197
Cash 500,000
Discount on bonds payable 192,197
12/31/x2
Interest expense 722,949
Cash 500,000
Discount on bonds payable 222,949
12/31/x3
Interest expense 758,621
Cash 500,000
Discount on bonds payable 258,621
Requirement (b):
4/1/x1
Cash 5,415,183
Bonds payable 5,000,000
Premium on bonds payable 240,183
Interest expense (or Interest payable) 175,000
Requirement (c):
(5,240,183 x 12% x 9/12) = 471,616
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3. Solution:
5,773,129
4. Solution:
12/31/x2
Bonds payable 5,000,000
Premium on bonds payable 277,777
Loss on derecognition 122,223
Cash (5M + 400,000) 5,400,000