AP Liabilities Supporting Computation

Topics: Generally Accepted Accounting Principles, Bond, Balance sheet Pages: 6 (1588 words) Published: April 13, 2015
PROBLEM NO. 1 - Heats Corporation
Requirement no. 1
Notes payable:
Arising from purchase of goods
Arising from bank loans, on which marketable securities valued at P600,000 have pledged as security, due Dec. 31, 2005
Arising from advances by officers, due June 30, 2005
Employees’ income tax withheld
Advances received from customers on purchase orders
Containers’ deposit
Accounts payable arising from purchase of goods (P170,000 + P30,000) Customers' account with credit balance
Cash dividends payable
Current portion of serial bonds (P50,000 x 2)
Overdraft with Allied Bank
Est. damages to be paid as a result of unsatisfactory performance on a contract Est. expenses on meeting guarantee for service requirements on mechandise sold Estimated premiums payable
Deferred revenue
Accrued interest on bonds payable
Provision - deficiency income tax assessment
TOTAL CURRENT LIABILITIES

500,000
50,000
20,000
64,000
50,000
200,000
40,000
80,000
100,000
90,000
160,000
120,000
75,000
87,000
360,000
200,000
2,500,000

A

Convertible bonds, due January 31, 2007
Noncurrent portion of serial bonds (P2,000,000 - P100,000)
TOTAL NONCURRENT LIABILITIES

1,000,000
1,900,000
2,900,000

B

5,400,000

C

TOTAL LIABILITIES (Requirement no. 2)

304,000

PROBLEM NO. 3 - Pistons Company
Item no. 2

Item no. 6

Item no. 8

Item no.10

Item no.11

Item no.12

Item no.19

Insurance expense (P24,000/12 x 1/2)
Prepaid insurance

1,000

Prepaid dues and subscription
Dues and subscription exp

5,000

Vouchers payable
Inventory

1,000

5,000
111,500
111,500

Legal and professional expense
Vouchers payable

46,000

Medical expense
Vouchers payable

25,000

Inventory
Vouchers payable

55,000

Machinery and equipment
Vouchers payable

46,000

25,000

55,000
254,000
254,000

PROBLEM NO. 2 - Sonic Corporation
1 Accounts payable per general ledger
Debit balances in suppliers' accounts
Goods in transit on 12/31/05, FOB shipping point
Unrecorded purchase return
Adjusted accounts payable
Accrued janitorial expenses (P144,000 x 2/3)
Accrued utilities (P67,200 x 15/30)
Total
2 Accrued salaries and wages
Income taxes withheld
SSS contributions payable
Philhealth contributions
Total
3 Since the outcome is only possible, the matter will only be disclosed. 4

5,440,000
240,000
192,000
(160,000)
5,712,000
96,000
33,600
5,841,600 D
776,000
56,000
64,000
16,000
912,000
-

D
A

B = 10% (P9,600,000 - B - T)
T = 30% (P9,600,000 - B)
T = P2,880,000 - .3B
B = 10% [P9,600,000 - B - (P2,880,000 - .3B)]
B = 10% (P9,600,000 - B - P2,880,000 + .3B)
B = 10% (P6,720,000 - .7B)
B = P672,000 - .07B
1.07B = P672,000
B = P628,000 (rounded off)

D

5 Principal amount due, 10/1/06
Accrued interest payable (P1,600,000 x 18% x 3/12)
Total

800,000
72,000
872,000

D

6 Estimated liability on purchase commitment [320,000 x (P5 - P4.40)]

192,000

D

7 Deferred tax assets and liabilities should not be presented as current 8 Warranty payable, 12/31/04
Add warranty expense accrued during 2005
Total
Less payments during 2005
Warranty payable, 12/31/05
9 Estimated coupons to be redeemed (160,000 x 60%)
Less coupons redeemed
Coupons outstanding
Divide by exchange rate
Premiums to be issued
Multiply by net premium cost (P100+P20-P30)
Estimated liability for coupons, 12/31/05
10 Advances against accounts receivable assigned are generally classified as borrowing and treated as current liabilities.

-

D

416,000
1,504,000
1,920,000
1,408,000
512,000

D

96,000
64,000
32,000
5
6,400
90
576,000

D

1,280,000

D

PROBLEM NO. 4 - Rockets Company
Requirement no. 1
1) Discount on bonds payable (P10,000,000 - P9,500,000)
Bonds payable
To correct the original entry on issuance of 10,000 bonds
Retained earnings (P500,000 x 14/102)
Interest expense (P500,000 x 12/102)
Discount on bonds payable
To...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Current Liabilities Essay
  • Contingent Liability Essay
  • Wacc Computation Essay
  • ap histoey Essay
  • Essay about ap psychology
  • Essay on Liability and Fair Market Value
  • AP Government Essay
  • Essay about ap world

Become a StudyMode Member

Sign Up - It's Free