Ch 13 Solutions

Ch 13 Solutions - SOLUTIONS TO EXERCISES EXERCISE 13-1...

Info iconThis preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
SOLUTIONS TO EXERCISES EXERCISE 13-1 (10–15 minutes) (a) Current liability. (b) Current liability. (c) Current liability or long-term liability depending on term of warranty. (d) Current liability. (e) Footnote disclosure (assume not probable and/or not reasonably estimable). (f) Current liability. (g) Current or noncurrent liability depending upon the time involved. (h) Current liability. (i) Current liability. (j) Current liability. (k) Current liabilities or long-term liabilities as a deduction from face value of note. (l) Current liability. (m) Current liability. (n) Current liability. (o) Footnote disclosure. (p) Separate presentation in either current or long-term liability section. EXERCISE 13-2 (15–20 minutes) (a) Sept. 1 Purchases . ............................................. 50,000 Accounts Payable . ........................ 50,000 Oct. 1 Accounts Payable . ................................. 50,000 Notes Payable . .............................. 50,000 Oct. 1 Cash . ....................................................... 75,000 Discount on Notes Payable . .................. 6,000 Notes Payable . .............................. 81,000 (b) Dec. 31 Interest Expense . ................................... 1,000 Interest Payable ($50,000 X 8% X 3/12) . ...............
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Dec. 31 Interest Expense . ................................... 1,500 Discount on Notes Payable ($6,000 X 3/12) . ........................... 1,500
Background image of page 2
EXERCISE 13-2 (Continued) (c) 1. Note payable . ................................ $50,000 Interest payable . ........................... 1,000 $51,000 2. Note payable . ................................ $81,000 Less discount ($6,000 – $1,500) . .. 4,500 $76,500 EXERCISE 13-3 (10–12 minutes) ALEXANDER COMPANY Partial Balance Sheet December 31, 2010 Current liabilities: Notes payable (Note 1) . .................................................... $300,000 Long-term debt: Notes payable refinanced in February 2011 (Note 1) . .... 900,000 Note 1. Short-term debt refinanced. As of December 31, 2010, the company had notes payable totaling $1,200,000 due on February 2, 2011. These notes were refinanced on their due date to the extent of $900,000 received from the issuance of common stock on January 21, 2011. The balance of $300,000 was liquidated using current assets. OR Current liabilities: Notes payable (Note 1) . .................................................... $300,000 Long-term debt: Short-term debt expected to be refinanced (Note 1) . ..... 900,000
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(Same footnote as above.)
Background image of page 4
EXERCISE 13-4 (20–25 minutes) SANTANA COMPANY Partial Balance Sheet December 31, 2010 Current liabilities: Notes payable (Note 1) . ................................................... $4,000,000* Long-term debt: Notes payable expected to be refinanced in 2011 (Note 1) . ......................................................................... 3,000,000 Note 1. Under a financing agreement with Golden State Bank the Company may
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/28/2011 for the course ACCT 103 taught by Professor Huxhold during the Spring '11 term at San Diego.

Page1 / 28

Ch 13 Solutions - SOLUTIONS TO EXERCISES EXERCISE 13-1...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online