Homework Answers
As per IAS 10 Events after the Balance sheet Date. Events that occur between the balance sheet date and date on which financial statement are authorized for issue can be classified as adjusting and non- adjusting events.
Adjusting events comprise of situations that provide evidence of conditions that existed at the balance sheet date. These events should be adjusted in financial statement before they are issued to various users of financial statement. While non adjusting events are those that are indicative of conditions that arose after the balance sheet date. These events are not required to be adjusted in financial statement. however, if non-adjusting events are material their non-disclosure could influence the economic decisions that users make on the basis of the financial statements. Therefore following disclosure are required:
1) Nature of event
2) Estimate of financial effect of such event. If the amount cannot be measured such statement should be made.
West wing distributions corporation financial year expired on 31st December 2016. The Events that occur between 31st Dec and 15th March 2017 are covered under IAS 10.
A) On Jan 22 , 2017 Negotiation for major merger were initiated with Blakedon Industries. Accordingly, this negotiation is an event occurring after Balance Sheet date. However, no adjustment to asset and liabilities is required as the event does not effect the determination and the condition of the amount stated in financial statement for the year ended on 31st Dec 2016. The event being significant, disclosure should be made regarding the undergoing negotiations regarding merger and Estimated consideration for merger.
B) Loan of $10 million was negotiated after Balance Sheet date. There is no indication that such condition existed on Balance sheet date. Hence the event is non adjusting. However, as mentioned that the amount of loan is material, Disclosure should be made in financial statement regarding the nature of loan taken, Party from which loan taken and the amount of loan taken.
C) Flood damage of $600000 that occurred on 25th Feb 2017 is also a non adjusting event since it occurred after balance sheet date. No condition of flood existed on 31st December 2016. However, amount of loss being significant.Disclosure regarding flood damages of $600000 to a manufacturing unit should be made in the financial statement.
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West Wing Distribution Corporation has a fiscal year end of December 31. On March 15,2017, the company's 2016 finan...
Hawkins Corporation began construction of a motel on March 31, 2016. The project was completed on...
Hawkins Corporation began construction of a motel on March 31, 2016. The project was completed on April 31, 2017. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $ 4,500,000, 6% note $19,700,000, 10% bonds Construction expenditures incurred were as follows: March 31, 2016 $4,450,000 June 30, 2016 6,450,000 November 30, 1,890,000 2016 February 28, 2017 3,450,000 The company's fiscal year-end is December 31. Required: Calculate...
Hawkins Corporation began construction of a motel on March 31, 2016. The project was completed on...
Hawkins Corporation began construction of a motel on March 31,
2016. The project was completed on April 31, 2017. No new loans
were required to fund construction. Hawkins does have the following
two interest-bearing liabilities that were outstanding throughout
the construction period:
$ 4,800,000, 6% note
$21,920,000, 10% bonds
Construction expenditures incurred were as follows:
March 31, 2016
$4,720,000
June 30, 2016
6,720,000
November 30, 2016
1,944,000
February 28, 2017
3,720,000
The company’s fiscal year-end is December...
Simon Company's year-end balance sheets follow At December 31 Assets 2017 2016 2015 as Accounts receivable,...
Simon Company's year-end balance sheets follow At December 31 Assets 2017 2016 2015 as Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 31,200 34,200 $ 36,700 52,800 54,200 4,305 291,369 278,627 231,995 $525,000 $470,000 $ 380,000 64,300 103,556 83,200 9,673 88,700 10,175 Liabilities and Equity Accounts payable $133,340 81,019 $ 48,655 Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 83,980 162,500 162,500162,500 84,865...
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Before making the year end adjustments to the company's December 31, 2017 financial new accountant of Phoenix Corporation discovered the following errors made statements, the by the previous accountant: 1. A property acquisition made on July 1, 2014 in the amount of $260,000 was recorded entirely to the Land account, instead of being of allocated between Land at $60,000 and Building at $200,000. The company's practice is to depreciate buildings straight line over 40 years with a full year's depreciation...
Simon Company's year-end balance sheets follow 2018 2017 At December 31 Assets 2016 $ 31,800 $...
Simon Company's year-end balance sheets follow 2018 2017 At December 31 Assets 2016 $ 31,800 $ 35,625 $ 37, 800 89,500 62,500 50,200 112,500 82,500 54,000 10,700 9,375 5,000 278,500 255,000 230, 500 $523,000 $445,000 $377,500 Accounts receivable, net Merchandise inventory Prepaid exponnes Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Locmon stock, S10 par value Retained earnings Total liabilities and equity $129,900 $ 75,250 S 51, 250 98,500...
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FINANCIAL ACCOUNTING II Effective April 1, 2016. The Syracuse Corporation, which has a year- end of December 31st, authorized $1.500.000 of callable, mortgage bonds (secured by $2,200,000 of property and equipment, at market value). The bonds paid interest at a rate of eight percent per year and had a term of six years. Interest was payable each September 30th and March 31. On July 1, 2017, Syracuse issued 1,000 of the bonds in exchange for cash in the total amount...
FINANCIAL ACCOUNTING II Effective April 1, 2016, The Syracuse Corporation, which has a year- end of...
FINANCIAL ACCOUNTING II Effective April 1, 2016, The Syracuse Corporation, which has a year- end of December 31st, authorized $1,500,000 of callable, mortgage bonds (secured by $2,200,000 of property and equipment, at market value). The bonds paid interest at a rate of eight percent per year and had a term of six years. Interest was payable each September 30th and March 31st On July 1, 2017. Syracuse issued 1,000 of the bonds in exchange for cash in the total amount...
The comparative balance sheets for Oriole Corporation show the following information. December 31 2017 2016 Cash...
The comparative balance sheets for Oriole Corporation show the following information. December 31 2017 2016 Cash $33,500 $12,900 Accounts receivable 12,200 9,900 Inventory 12,100 8,900 Available-for-sale debt investments –0– 3,000 Buildings –0– 29,600 Equipment 44,700 19,800 Patents 5,000 6,300 $107,500 $90,400 Allowance for doubtful accounts $2,900 $4,400 Accumulated depreciation—equipment 2,000 4,400 Accumulated depreciation—building –0– 6,000 Accounts payable 5,000 3,000 Dividends payable –0– 5,000 Notes payable, short-term (nontrade) 3,000 4,000 Long-term notes payable 31,000 25,000 Common stock 43,000 33,000 Retained earnings...
Hawkins Corporation began construction of a motel on March 31, 2016. The project was completed on April 31, 2017. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period: $ 4,500,000, 6% note $19,700,000, 10% bonds Construction expenditures incurred were as follows: March 31, 2016 $4,450,000 June 30, 2016 6,450,000 November 30, 1,890,000 2016 February 28, 2017 3,450,000 The company's fiscal year-end is December 31. Required: Calculate...
Hawkins Corporation began construction of a motel on March 31,
2016. The project was completed on April 31, 2017. No new loans
were required to fund construction. Hawkins does have the following
two interest-bearing liabilities that were outstanding throughout
the construction period:
$ 4,800,000, 6% note
$21,920,000, 10% bonds
Construction expenditures incurred were as follows:
March 31, 2016
$4,720,000
June 30, 2016
6,720,000
November 30, 2016
1,944,000
February 28, 2017
3,720,000
The company’s fiscal year-end is December...
Simon Company's year-end balance sheets follow At December 31 Assets 2017 2016 2015 as Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets $ 31,200 34,200 $ 36,700 52,800 54,200 4,305 291,369 278,627 231,995 $525,000 $470,000 $ 380,000 64,300 103,556 83,200 9,673 88,700 10,175 Liabilities and Equity Accounts payable $133,340 81,019 $ 48,655 Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity 83,980 162,500 162,500162,500 84,865...
Before making the year end adjustments to the company's December 31, 2017 financial new accountant of Phoenix Corporation discovered the following errors made statements, the by the previous accountant: 1. A property acquisition made on July 1, 2014 in the amount of $260,000 was recorded entirely to the Land account, instead of being of allocated between Land at $60,000 and Building at $200,000. The company's practice is to depreciate buildings straight line over 40 years with a full year's depreciation...
Simon Company's year-end balance sheets follow 2018 2017 At December 31 Assets 2016 $ 31,800 $ 35,625 $ 37, 800 89,500 62,500 50,200 112,500 82,500 54,000 10,700 9,375 5,000 278,500 255,000 230, 500 $523,000 $445,000 $377,500 Accounts receivable, net Merchandise inventory Prepaid exponnes Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Locmon stock, S10 par value Retained earnings Total liabilities and equity $129,900 $ 75,250 S 51, 250 98,500...
Simon Company's year-end balance sheets follow. 2017 2016 2015 At December 31 Assets Cash Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets, net Total assets Liabilities and Equity Accounts payable Long-term notes payable secured by mortgages on plant assets Common stock, $10 par value Retained earnings Total liabilities and equity $ 31,300 $ 34,400 89,400 64,000 77,174 85,000 10,950 10,185 356,176 291,415 $565,000 $485,000 $ 36,600 55,000 51,200 3,308 163,892 $ 310,000 $142,092 $ 81,965 $ 40,511 106,220 189,319...
FINANCIAL ACCOUNTING II Effective April 1, 2016. The Syracuse Corporation, which has a year- end of December 31st, authorized $1,500,000 of callable, mortgage bonds (secured by $2,200,000 of property and equipment, at market value). The bonds paid interest at a rate of eight percent per year and had a term of six years. Interest was payable each September 30th and March 31. On July 1, 2017, Syracuse issued 1,000 of the bonds in exchange for cash in the total amount...
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FINANCIAL ACCOUNTING II Effective April 1, 2016, The Syracuse Corporation, which has a year- end of December 31st, authorized $1,500,000 of callable, mortgage bonds (secured by $2,200,000 of property and equipment, at market value). The bonds paid interest at a rate of eight percent per year and had a term of six years. Interest was payable each September 30th and March 31st On July 1, 2017. Syracuse issued 1,000 of the bonds in exchange for cash in the total amount...
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