(solution) Illustration (Zero-Interest-Bearing Note): On March 1, Landscape

(solution) Illustration (Zero-Interest-Bearing Note): On March 1, Landscape

This homework question is regarding current liabilities in ACCOUNTING 310

The homework is on the attachments along with an example.

Illustration (Zero-Interest-Bearing Note): On March 1, Landscape issues
[sells] a $102,000, four-month [due July 1], zero-interest-bearing note to Castle
National Bank. The present value of the note is $100,000. Landscape if market
rate = 6%; records this transaction as follows.
Excel 1
1-Mar
Note :
$
Rate/APR
term-months
Simple interest
Discounted for interst $
Simple interest $
Straight line interest $ JE 102,000
6%
4 = Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest 100,000 without Present value calculation
2,000
500 per month 1-Mar
$ Cash
Notes payable
Discount on Notes [contra liability] JE 0.50%
per month DR
100,000 $ CR 2,000 $ 30-Jun DR Interest expense
Discount on Notes [contra liability] 102,000 CR $ 2,000
$ 2,000 Balance = -0- JE 1-Jul
Notes payable
Cash DR
102,000 $ CR
$ 102,000 Excel 2 Note :
$
Rate/APR
term-months Rate: 81,000
8.000%
12 = 0.6666667%
per month 8.00%
+RATE(1,81000,-75000,) Simple interest
Oct. 1 – Borrowed $75,000 from the Shore Bank by
Discounted for interst $
75,000 without Present value calculation
signing a Simple interest $ zero-interest-bearing $81,000
12-month, 6,000
Straight line interest $
500 per month
note. [to 12/31] JE 10/1/2xx2 DR Cash $
Notes payable
Discount on Notes [contra liability] JE 12/31/2xx2 CR
75,000
$ $ DR 8%
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
Not discounted // Simple interest
75000 Not discounted // Simple interest
Not discounted // Simple interest CR Interest expense
Discount on Notes [contra liability] $ Discount on Notes [contra liability] JE 81,000 6,000 3 months = 1/4 yr Excel Rate function three of 12 months 1,500 Balance = $4500 $ 1,500 $ 76,500 10/1/2xx3 assumimg no other entries during 2013
Interest expense
$
Discount on Notes [contra liability]
Notes payable
$
Cash
Discount on Notes [contra liability]
Balance = -0- DR CR
4,500
$ 4,500 $ $ 81,000 81,000 81,000 BE13-5: Sports Pro Magazine sold 12,000 annual subscriptions on
August 1, 2xx2, for $18 each. Prepare Sports Pro?s August 1, 2xx2, journal entry
and the December 31, 2xx2, annual adjusting entry. Monthly issues staring Sept.1. No sales tax
Excel 3
Subscriptions
each $
Total
$
Normal: ??? 1-Aug $
08/30/12
09/30/12
10/31/12
11/30/12
12/31/12
01/31/13 12000
18.00
216,000
Debit
(Credit)
Cash
216,000
0
0
0
0
0
0 Credit
(Debit)
Sales
0
0
$18,000
$18,000
$18,000
$18,000
$18,000 Credit
(Debit)
Unearned revenue
$
216,000 CR
0
$
(18,000) DR
$
(18,000)
$
(18,000)
$
(18,000) YE
$
(18,000) 02/28/13
03/31/13
04/30/13
05/31/13
06/30/13
07/31/13
08/31/13
$
August JE Dec. JE Dec JE 8/1/2012
Cash
$
Unearned revenue 12 12/31/20
Unearned revenue
Sales $ Dr
216,000 $18,000
$18,000
$18,000
$18,000
$18,000
$18,000
$18,000
216,000 $ $
$
$
$
$
$
$
$ (18,000)
(18,000)
(18,000)
(18,000)
(18,000)
(18,000)
(18,000)
– Excel 3 CR
$ 216,000 Dr
72,000 CR
$ 13 12/31/20
Sales
Sales 0
0
0
0
0
0
0
216,000 $ 4 months
72,000 Dr
144,000 CR
$ 8 months
last mo. = August 144,000 Wage payable Excel 4 Payroll is paid on Tuesday for wages earned through the prior week Wednesday
The months ends on Monday
Each workday costs the the company in wages:
$5,300
Workdays are M-T-W-Th-F — 5 days per week
Workdays owed to employees
Amount owed to employees $
The Account balance in Wage payable prior to this adjusting JE is $
Month end JE
Wages expense
Wages payable [ Accrued wages] PV of Contigency Dismatling & removal $
Years
Rate $ pay
work
vacation
holidays 8 work
pay 42,400.00
4,650.00
Dr Cr
37,750.00
$ work
Vac.Hol 37,750.00 Excel 5 1,000,000
5
10% Present Value Cash flow
1
0
2
0
3
0
4
0
5 $
1,000,000 Table $
$
$
$
$ 620,921.32
$620,921.32 $ 620,921.32
=+NPV(D130,D133:D137)
Imputed Interest Interest: rate X beginning BV
1
2
3
4
5 $379,078.68 $ 1,000,000 Interest Expense = Dr.
$
$
62,092.13 CR. Asset retirement obligation
$
$
68,301.35 CR. Asset retirement obligation
$
$
75,131.48 CR. Asset retirement obligation
$
$
82,644.63 CR. Asset retirement obligation
90,909.09 CR. Asset retirement obligation
$1,000,000.00 $ Asset retirement liability = $ $620,921.32
683,013.46
751,314.80
826,446.28
909,090.91 $
379,078.68
1,000,000 by end year 5 $50 hr
40
3 weeks
2 weeks 10 47 weeks
52 weeks $94,000
$10,000
10.64% 10K/$p4K
Ea. Work week $ 212.77 $10K / 47
Dr. Benefit expense [ or Wage expnse]
Cr. Accrued benefits [ ior vacation / holiday] IBM
Liabilities & Shareholders' Equity
2009
ST Debt & Current Portion LT Debt
Short Term Debt
Current Portion of Long Term Debt
Accounts Payable
Income Tax Payable
Other Current Liabilities
Dividends Payable
Accrued Payroll
Miscellaneous Current Liabilities
Total Current Liabilities 4.17B
1.95B
2.22B
7.44B
3.83B
20.57B
4.51B
16.07B
36B $ billions 2010
6.78B
2.76B
4.02B
7.8B
4.22B
21.76B
5.03B
16.74B
40.56B 2011
8.46B
4.16B
4.31B
8.52B
3.31B
21.83B
5.1B
16.73B
42.12B 2012
9.18B
3.59B
5.59B
7.95B
4.95B
21.54B
4.75B
16.8B
43.63B 2014
9.31B
0
9.31B
6.87B
2.25B
22.64B
3.66B
18.97B
41.06B 5-year
trend ACC 310
HCT
HW
Ch.13
Current Liabilities A.
On December 31, 2012,ClassCo had $25,000,000 of short-term debt in the form of its notes payable on June 12, 2013.
ClassCo had in place @ 12/31/12 provisions to issue $10,000,000 of stock to settle some of that debt; ClassCo had a
firm commitment from Big Bank to close on February 1, 2013 a bank loan for $11,000,000 to be repaid on 11/20/2012
and to use those proceeds to retire some of he $25illion debt and had a firm commitment from Bank2 to close on
Jan26 2013 for $5,000,000 of long term Note payable in full on 7/1/2015.
If ClassCo has no other debt how Should Current & Long term Debt be show on the Balance Sheet of !2/31/2012 B
ClassC0 signed a $100,000 Zero-face rate Note with Big Bank on 10/31/2012 payable TEN MONTHS FROM THAT DATE;
the imputed interest was 12%.
What was the Current liability for this note at 12/31/2012
Explain or show calculations as to how answer determined C
ClassCo sold 1200 subscription to its theater series
each purchaser can attend 1 show per month
series runs for 6 months beginning April & ending September
Show is last Thursday of each month
a subscription is $300 each
Subscription were sold & paid for 1/4 in each month of JAN_FEB_MAR_APril
Complete the Table
Sales or
Debit
Revenue
to Cash
credited
in Month in the Month
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct ME Balance
Unearned
Revenue