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You are in charge of auditing PLM (PopoyLangMalakas) Company's investment
accounts for the year ended December 31, 2021, which was incorporated last March 3, 2020. During the course of the audit, you have obtained the balances and the
related
following information:
Question 1: The adjustment to correct the interest income for 2021 includes a
debit/(credit) to the interest revenue account amounting to? (Put a negative
sign if credit)
Question 2: How much is the retroactive adjustment to the beginning balance of
(Please indicate debit or (credit), use negative sign if credit).
Question 3: The correct amount of investment in BSP bonds that should be
presented in the
Step by step
Solved in 2 steps
- You are in charge of auditing PLM (PopoyLangMalakas) Company's investment accounts for the year ended December 31, 2021, which was incorporated last March 3, 2020. During the course of the audit, you have obtained the balances and the related journal entries of its investment related transactions and have revealed the following information: Investment in Bonds P101,258 Investment in Stocks 62,400 Total P163,658 Journal Entries: Investment in bonds - 10% treasury bonds from the Banko Sentral ng Pilipinas. The investment is in a portfolio which has the objective of collecting contractual cash flows. Date Account Debit Credit July 1, 2020 Investment in BSP bonds 105, 242 Cash 105, 242 To record the acquisition of P100,000 face value BSP bonds December 31, 2020 Unrealized Gain / (Loss) on market changes 2,242 Investment in BSP bonds…You are in charge of auditing PLM (PopoyLangMalakas) Company's investmentaccounts for the year ended December 31, 2021, which was incorporated last March3, 2020. During the course of the audit, you have obtained the balances and therelated journal entries of its investment related transactions and have revealed thefollowing information:Investment in Bonds P101,258Investment in Stocks 62,400Total P163,658 see 1st image Audit Notes: The market rate for similar bonds at date of acquisition is 8%. The bonds will mature on July 1, 2023. The journal entries pertaining to the market value adjustments was prepared by the accountant in accordance with the following information: see image 2 Question 1: The adjustment to correct the interest income for 2021 includes a debit/(credit) to the interest revenue account amounting to? (Put a negative sign if credit) Question 2: How much is the retroactive adjustment to the beginning balance of retained earnings for the year 2021, pertaining to the…The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1, 2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securities that is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be held until their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costing P29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, and treasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bond retirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds…
- The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1,2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securitiesthat is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be helduntil their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costingP29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, andtreasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bondretirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds payable…The following information is also available: 1. Current assets include cash P3,800, accounts receivables P18,500, note receivables (maturity date is on July 1,2023) P10,000 and land P12,000. 2. Long term investments include a P4,600 investment in fair value though other comprehensive income securitiesthat is expected to be sold in 2022 and a P9,000 investment in AllDay company bonds that are expected to be helduntil their December 31, 2029 maturity date. 3. Property and equipment include buildings costing P63,400, inventories costing P30,500 and equipment costingP29,600. 4. Intangible assets include patents that cost P8,200 and on which P2,300 amortization have accumulated, andtreasury shares that costs P1,800. 5. Other assets include prepaid insurance (which expires on November 30, 2022) P2,900, sinking fund for bondretirement P7,000 and trademarks that cost P5,200 and on which P1,500 amortization has accumulated. 6. Current liabilities include accounts payable P19,400, bonds payable…Ticker Services began operations in Year 1 and holds long-term investments in available-for-sale debt securities. The year-end cost and fair values for its portfolio of these investments follow. Portfolio of Available-for-Sale Securities December 31, Year 1 December 31, Year 2 Cost $ 13,000 20,000 23,000 16,500 December 31, Year 3 December 31, Year 4 Complete this question by entering your answers in the tabs below. Prepare journal entries to record each year-end fair value adjustment for these securities. Adjustment General Journal Calculation Calculation adjustment required to fair value adjustment. 12/31/Year 1 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/Year 2 Existing balance in Fair Value Adjustment-AFS (LT) Required balance in Fair Value Adjustment-AFS (LT) Adjustment required to Fair Value Adjustment-AFS (LT) 12/31/Year 3 Existing balance in Fair Value…
- Consider the relative liquidity of the following assets: Assets 1. A bond issued by a publicly traded company 2. The funds in a money market account 3. A $20 bill 4. Your truck Select the assets in order o Most Liquid Second-Most Liquid Third-Most Liquid Least Liquid Bond 520.00 bill Truck Funds held in a money market account quid.. Which of the following securities would be classified as marketable securities inthe current asset section of the balance sheet?a) Commercial paper, U.S. Treasury bills, land held for investment.b) Commercial paper, U.S. Treasury bills, negotiable certificates of deposit.c) Commercial paper, land held for investment, bonds with maturities in 10 years.d) U.S. Treasury bills, long-term stock investment, bonds with maturities in 10years.*For each of the following items, specify whether the information would most likely be found on the balance sheet, the income statement, the statement of cash flows, or in the notes to the statements. 1. The amount of a bond liability. 2. A description of any bond covenants. 3. The coupon rates associated with bond issuances. 4. Interest expense for the period. 5. The maturity dates associated with bond issuances. 6. Cash interest paid for the period. Location
- Bond (Held-to-Maturity)Investment Journalize the entries to record the following selected bond investment transactions for Marr Products: If an amount box does not require an entry, leave it blank. D.) Received face value of remaining bonds at their maturity. Cash- Investments- Hotline Inc. Bonds- I just need help with part D, Thanks!Soto Industries Inc. is an athletic footware company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Soto Industries Inc., which has a fiscal year ending on December 31: Instructions 1. Journalize the entries to record these transactions. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?Rekya Mart Inc. is a general merchandise retail company that began operations on January 1, Year 1. The following transactions relate to debt investments acquired by Rekya Mart Inc., which has a fiscal year ending on December 31: Instructions 1. Journalize the entries to record these transactions. 2. If the bond portfolio is classified as available for sale, what impact would this have on financial statement disclosure?