The following selected account balances were taken from the balance sheet of Q Corp December 31, 2021, immediately before the take over of the trustee: Marketable secu P300,000; Inventories P110,00; Land P150,000; Building P400,000. Marketable securiti present market value of P320,000. These securities have been pledged to secure notes P280,000. The estimated worth of inventories of P70,000. However, inventories with b P50,000 have been pledged to secure notes payable of P60,000. The realizable value o
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- The following information relates to non-current investments that Dragon Company placed in trust as required by underwriter of its bonds: Bond sinking fund balance, January 1, 2018, P2,000,000; Additional investment during 2018, P500,000; Interest revenue, P20,000; Administrative costs, P15,000,Carrying value of bonds payable, P3,000,000. What amount should Dragon Company report in its December 31, 2018 balance sheet related to its non-current investment for bond sinking fund requirements?The following information relates to non-current investments placed in trust by XX Company. This investment is in compliance with the requirements of an issue of P4,000,000 bonds by XX. Bond sinking fund, Jan. 1, 2019 P2,250,000 Additional investments to the fund during 2019 450,000 Dividend revenue on equity securities investments 75,000 Interest revenue on debt securities investments 150,000 Administration costs 25,000 What amount should XX Company in its December 31, 2019 statement of financial position related to its non-current investments for bond sinking fund?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…On January 1, 2018, an entity purchased bonds with face amount of P5,000,000. The entity paid P4,500,000 plus transaction cost of P168,600. The bonds mature on December 31, 2020 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on December 31, 2018 and 110 on December 31, 2019.The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2019, the entity changed its business model to collect only contractual cash flows. On December 31, 2020, the bonds are quoted at 115 and the market interest rate is 10%. find the following: 1. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2018? 2. What amount of unrealized gain should be reported as component of OCI in the statement of…
- The balance sheets for Sports Unlimited for 2021 and 2020 are provided below.SPORTS UNLIMITED Balance Sheets For the years ended December 31 2021 2020AssetsCurrent assets:Cash $ 103,500 $ 70,400Accounts receivable 46,800 32,000Inventory 44,550 71,200Prepaid rent 7,200 3,600Long-term assets:Investment in bonds 54,900 0Land 117,450 141,600Equipment 106,200 102,000Less: Accumulated depreciation (30,600) (20,800)Total…On January 1, 2020, Clarettes Inc. established a sinking fund of P2,000,000 under a trustee BDO Bank for payment of Bonds Payable which will mature on January 1, 2022. On December 31, 2020, the periodic trustee report shows that P1,000,000 was invested in securities and P500,000 in money market placement. On December 31, 2021, the periodic report from the trustee shows that the securities were sold for P1,300,000 and interest received on money market placement was P50,000. The trustee’s fees and administrative expenses during the year are P50,000 and P20,000 respectively. On January 1, 2022, Clarettes received a periodic report from the trustee that bonds payable of P2,000,000 and interest of P200,000 were paid. Required: 1. Prepare the entry for the preceding transaction 2. Based on the result of your audit, determine the following: A. Book value of bond sinking fund on December 31, 2020 B. Book value of bond sinking fund on December 31, 2021 C. Cash remitted to Clarettes from…General Investment Co. (GIC) purchased bonds on January 1, 2021. GIC's accountant has projected the following amortization schedule from purchase until maturity: Date Cash Received Interest Revenue Amortization of Discount Amortized Cost 1/1/2021 $ 194,758 6/30/2021 $ 7,000 $ 7,790 $ 790 195,548 12/31/2021 7,000 7,822 822 196,370 6/30/2022 7,000 7,855 855 197,225 12/31/2022 7,000 7,889 889 198,114 6/30/2023 7,000 7,925 925 199,039 12/31/2023 7,000 7,961 961 200,000 1. At a discount. 2. At par. 3. Cannot be determined from the given information.…
- On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%. What mount of cumulative unrealized gain should be reported as component of OCI in the statement of changes in equity for 2020?On January 1, 2021, PHILIPPINE COMPANY acquired 5-year, 15%, $8,000,000 H-bonds. The investments were acquired at aprice to yield 14%. Interest is payable annually on December 31 starting December 31, 2021. PHILIPPINES' business model isto hold the financial assets to collect contractual cash flows. QUESTION:a. Determine the initial measurement of H-bonds on January 1, 2021.b. Prepare a schedule of amortization using the effective interest method. Use the following columns:DateInterestCollectionInterestIncomeAmortizationPresent Valuec. Prepare all journal entries for 2021 and 2022 applicable to this transaction.General Investment Co. (GIC) purchased bonds on January 1, 2021. GIC's accountant has projected the following amortization schedule from purchase until maturity: Date Cash Received Interest Revenue Amortization of Discount Amortized Cost 1/1/2021 $ 194,758 6/30/2021 $ 7,000 $ 7,790 $ 790 195,548 12/31/2021 7,000 7,822 822 196,370 6/30/2022 7,000 7,855 855 197,225 12/31/2022 7,000 7,889 889 198,114 6/30/2023 7,000 7,925 925 199,039 12/31/2023 7,000 7,961 961 200,000 Recording the bond purchase would have what effect on the financial statements?