CHAPTER%2009%20POWER%20POINT%202008

CHAPTER%2009%20POWER%20POINT%202008 - CHAPTER 09...

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Unformatted text preview: CHAPTER 09 LIABILITIES CURRENT LIABILITIES WORKING CAPITAL- FUNDS AVAILABLE TO USE AFTER CURRENT LIABILITES ARE PAID OFF. C.A. C.L. = WORKING CAPITAL USED TO CHECK LIQUIDITY LINE OF CREDIT- NEGATIVE CASH, SHORT TERM BANK LOAN BANK INDEBTEDNESS Mortagages, notes payable, loans with blended payments NOTES PAYABLE ASSUME YOU BORROWED $ 30, 000 TO BE PAID BACK MONTHLY OVER 10 YEARS PLUS 5% INTEREST. MONTH PAYMENT INTEREST PRINCIPLE BALANCE 30,000.00 1 318.21 125.00 * 193.21 29,806.79** 2 318.21 124.19*** 194.02 29,612.77**** 3 318.21 123.38 194.83 29,417.94 4 318.21 122.57 195.64 29,222.30 5 * 30,000 X .05 X 1/12 = 125.00 **30,000 -193.21 = 29806.79 ***29,806.79 X .05 X 1/12= 124.19 ****29806.79-194.02= 29612.77 29612.77 x .05 x 1/12 = 123.38 INCOME TAXES PAYABLE MUST BE PAID MONTHLY. BASED ON PREVIOUS YEARS INCOME. TAX RETURN CAN BE FILED 6 MONTHS AFTER YEAR END. TAXES MUST BE PAID UP 2 MONTHS AFTER YEAR END. PAID TO FEDERAL GOVT. AND QUEBEC GOVT. WARRANTY PAYABLE UPON SALE OF A PRODUCT OR SERVICE COMPANYS WILL OFTEN ADD A GUARANTEE / OR WARRANTY. A PROMISE THAT PRODUCT WILL NOT FAIL. AT THE TIME OF SALE COMPANY MUST ESTIMATE THE WARRANTY EXPENSE. DR WARRANTY EXP $XXXX CR WARRANTY PAYABLE $XXXXXX CURRENT PORTION OF LONG TERM DEBT ASSUME YOU BORROWED $ 30, 000 TO BE PAID BACK YEARLY OVER 10 YEARS ( PLUS 5% INTEREST). YEAR PAYMENT PRINCIPLE BALANCE 30,000 1 3,000 3,000 27,000 2 3,000 3,000 24,000 CURRENT PORTION OF LONG TERM DEBT LIABILITIES 2004 2005 CURRENT LIABILITIES CURRENT PORTION NOTE PAYABLE 3,000 3,000 LONG TERM LIABILITIES NOTE PAYABLE 27,000 24,000 (TOTAL LTD) 30,000 27,000 BOND PAYABLE Chapter 10 pages 568 to 582- brief summary. Bond Payable; Long term debt, to be repaid plus interest. Interest can be paid yearly , semi annually, etc. Principle is usually paid at maturity. Who can issue/sell bonds? 1.Large public corp. 2.Government Why issue Bonds? Bond payable continued Bond can be issued 3 ways: At Par - Face value. At a discount- Below par value At a premium- Above par value 1-Bond par value $10,000. Investor pays $10,000 , investor receives interest annually ,at maturity investor gets back the 10,000. Bond payable....
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This note was uploaded on 08/06/2009 for the course MANAGEMENT MGCR 211 taught by Professor Zajdman during the Summer '09 term at McGill.

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CHAPTER%2009%20POWER%20POINT%202008 - CHAPTER 09...

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