Ch12 Solutions
Chapter 12: Liabilities
Suggested Time
Case 12-1 Dry Clean Depot Limited 12-2 Darcy Limited 12-3 Homebake Incorporated
Assignment 12-1 Liability issues 25 12-2 Liability recognition (W*) 25 12-3 Warranty 10 12-4 Estimated obligations 20 12-5 Liability measurement……………………….. 15 12-6 Measurement of estimated liabilities 20 12-7 Long-term note—borrower and lender 35 12-8 Note with below-market interest rate 35 12-9 Debt issuance, fair value 25 12-10 Bonds—compare effective interest, straight-line 45 12-11 Bonds—effective interest, straight-line (*W) 50 12-12 Bond interest 30 12-13 Bond interest 30 12-14 Bonds issued between interest dates (*W) 40 12-15 Bonds—between interest dates; effective interest 40 12-16 Bonds issued between interest dates 35 12-17 Upfront fees 25 12-18 Upfront fees and notes payable 25 12-19 Borrowing costs 25 12-20 Borrowing costs 25 12-21 Retirement—open market purchase 25 12-22 Bond retirement (W*) 30 12-23 Bond retirement 45 12-24 Bond retirement 20 12-25 Bond issuance and retirement, accrued interest 40 12-26 Bond issuance, defeasance 40 12-27 Bonds, comprehensive 40 12-28 Foreign exchange 20 12-29 Foreign exchange (*W) 20 12-30 Partial statement of cash flow 30
*W The solution to this assignment is on the text Web site and in the Study Guide. The solution is marked WEB.
Questions
1. The definition of a liability embodies a future sacrifice of assets or services, a present obligation, as a result of a past transaction or event.
2. A financial liability exists when one company has a liability and another entity has a financial asset. Non-financial liabilities are all other liabilities; no corresponding financial asset arises on the books of the counter-party. Examples include liabilities for environmental remediation, lawsuits
Suggested Time
Case 12-1 Dry Clean Depot Limited 12-2 Darcy Limited 12-3 Homebake Incorporated
Assignment 12-1 Liability issues 25 12-2 Liability recognition (W*) 25 12-3 Warranty 10 12-4 Estimated obligations 20 12-5 Liability measurement……………………….. 15 12-6 Measurement of estimated liabilities 20 12-7 Long-term note—borrower and lender 35 12-8 Note with below-market interest rate 35 12-9 Debt issuance, fair value 25 12-10 Bonds—compare effective interest, straight-line 45 12-11 Bonds—effective interest, straight-line (*W) 50 12-12 Bond interest 30 12-13 Bond interest 30 12-14 Bonds issued between interest dates (*W) 40 12-15 Bonds—between interest dates; effective interest 40 12-16 Bonds issued between interest dates 35 12-17 Upfront fees 25 12-18 Upfront fees and notes payable 25 12-19 Borrowing costs 25 12-20 Borrowing costs 25 12-21 Retirement—open market purchase 25 12-22 Bond retirement (W*) 30 12-23 Bond retirement 45 12-24 Bond retirement 20 12-25 Bond issuance and retirement, accrued interest 40 12-26 Bond issuance, defeasance 40 12-27 Bonds, comprehensive 40 12-28 Foreign exchange 20 12-29 Foreign exchange (*W) 20 12-30 Partial statement of cash flow 30
*W The solution to this assignment is on the text Web site and in the Study Guide. The solution is marked WEB.
Questions
1. The definition of a liability embodies a future sacrifice of assets or services, a present obligation, as a result of a past transaction or event.
2. A financial liability exists when one company has a liability and another entity has a financial asset. Non-financial liabilities are all other liabilities; no corresponding financial asset arises on the books of the counter-party. Examples include liabilities for environmental remediation, lawsuits