Chapter 14, Problem 8ICA

Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some questions as to the proper classification of the following items: $50,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2025. Prepaid rent of $24,000, covering the period January 1, 2022, through December 31, 2023. Notes payable of $200,000. The notes are payable in annual installments of $20,000 each, with the first installment payable on March 1, 2022. Accrued interest payable of $12,000 related to the notes payable. Investment in equity securities of other corporations, $80,000. Cone intends to sell one-half of the securities in 2022. Required:Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported.

Lavender Company had the following information related to its current liabilities for the year ended, December 31, 2021. The results of your inquiry and observation were summarized below: Notes Payable arising from 3 year bank loans, on which a securities valued at 1,000,000 have been pledge as security, due on December 31, 2022. (Note 1) Accounts payable, net of debit balances of P100,000 (Note 2) Accrued Payroll (Note 3) PhilHealth, and PAG-IBIG payable SSS payable Employee income tax withheld Bonus and profit sharing payable (Note 4) Liability for income taxes (Note 5) Cash dividends payable Share dividend payable Dividend in arrears on preference shares Estimated liability for damages 800,000 3,160,000 240,000 25,000 16,000 25,000 ? 300,000 120,000 150,000 200,000 130,000 The following audit notes were summarized by the audit staff: Note 1: Notes payable arising from bank loans The notes payable from bank loan is dated December 31, 2019 due on December 31, 2022 with annual interest…

Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some questions as to the proper classification of the following items: a. $66,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2025. b. Prepaid rent of $40,000, covering the period January 1, 2022, through December 31, 2023. c. Notes payable of $232,0o00. The notes are payable in annual installments of $36,000 each, with the first installment payable on March 1, 2022. d. Accrued interest payable of $28,000 related to the notes payable. e. Investment in equity securities of other corporations, $112,000. Cone intends to sell one-half of the securities in 2022. Required: Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported. CONE CORPORATION Balance Sheet (Partial) At December 31, 2021 Assets

Purdum Farms borrowed $10 million by signing a five-year note on December 31, 2016. Repayments of the principal are paid annually in installments of $2 million each. Purdum Farms made the first payment on December 31, 2017 and then prepared its 2017 year-end financial statements. What amount should be reported as current liabilities in connection with the note at December 31, 2017?   $10 million   $0   $8 million   $2 million

Consider the following liabilities of Future Brands, Inc., at December 31, 2018, the company’s fiscal year-end.Should they be reported as current liabilities or long-term liabilities?1. $77 million of 8% notes are due on May 31, 2022. The notes are callable by the company’s bank, beginningMarch 1, 2019.2. $102 million of 8% notes are due on May 31, 2023. A debt covenant requires Future to maintain a currentratio (ratio of current assets to current liabilities) of at least 2 to 1. Future is in violation of this requirementbut has obtained a waiver from the bank until May 2019, since both companies feel Future will correct thesituation during the first half of 2019.

The Company issued a short-term debt of $65,000 on July 1, 2021 for a period of 5 months with a note payable of 14% interest. The company uses the accounting period on a quarterly basis. Required: Prepare the journal entries needed to record the issuance of the debt, recognize interest expense, matures. and pay off the debt as it Note: Include the current method of processing and the excel formulas from start to finish!

Al Jabel Corporation is preparing financial statement for the year ended December 31, 2019. For each item below, indicate the dollar amount to be reported as either current liability or non-current liability. a. At the end of the year 8% bonds payable of OMR 5,000,000 are outstanding. Interest is payable on September 30 each year and mature in 4 equal instalments every September 30. b. At December 31, 2018, customers’ advances were OMR 18,000,000. During 2019, Al Jabel collected OMR 45,000,000 of customers’ advances, and advances of OMR 37,500,000 were earned. c. On December 31, 2019, Al Jabel declare a cash dividend of OMR 3 per share, payable on January 15, 2021. Al Jabel has issued 2,000,000 ordinary shares of which 1,000,000 shares held in treasury

Presented below are two different situations related to Mckee Corporation’s debt obligations. Mckee’s next financial reporting date is December 31, 2017. The financial statements are authorized for issuance on March 1,2018.1. Mckee has a long-term obligation of $400,000, which is maturing over 4 years in the amount of $100,000 per year. The obligation is dated November 1, 2017, and the first maturity date is November 1, 2018.2. Mckee has a short-term obligation due February 15, 2018. Its lender agrees to extend the maturity date of this loan to February 15, 2020. The agreement for extension is signed on January 15, 2018.InstructionsIndicate how each of these debt obligations is reported on Mckee’s statement of financial position on December 31, 2017.

The Company issued a short-term debt of $65,000 on July 1, 2021 for a period of 5 months with a note payable of 14% interest. The company uses the accounting period on a quarterly basis. Required: Prepare the journal entries needed to record the issuance of the debt, recognize interest expense, and pay off the debt as it matures. Note: Include the current method of processing and the excel formula