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Intacc - Q1

The document contains a series of questions related to the classification and reporting of liabilities in financial statements. It discusses how to classify liabilities as current or noncurrent, the impact of unearned revenue on financial position, and provides specific examples from companies like Pats Inc and Dwight Company. Additionally, it includes calculations for total current liabilities based on provided data.

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132 views4 pages

Intacc - Q1

The document contains a series of questions related to the classification and reporting of liabilities in financial statements. It discusses how to classify liabilities as current or noncurrent, the impact of unearned revenue on financial position, and provides specific examples from companies like Pats Inc and Dwight Company. Additionally, it includes calculations for total current liabilities based on provided data.

Uploaded by

Janah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
Question 1 2/2pts Some liabilities, such as trade payables, accruals for employee and other operating costs, are expected to be settled in more than twelve months after the reporting period. How will an entity classify these items in the statement of financial position? Noncurrent elve months, First classify as noncurrent since the term is more than tv then reclassify to current if the term is less than twelve months. It will depend on the entity's policy © Current Question 2 2/2pts Pats Inc is a resort located in Canada. Pats Inc collects cash when guests make a reservation. During December 2012, Pats Inc collected P60,000 of cash and recorded the receipt by recognizing unearned revenue. By the end of the month, Pats Inc had earned one-third of this amount, the other two-thirds will be earned during January 2013. The adjusting entry required at December 31, 2012 would impact the statement of financial position by © Decreasing Liabilities P20,000 Decreasing Equity P20,000 ity P. 00 Increasing Increasing Assets P60,000 Question 3 2/2pts Included in Dwight Company's liability balances on December 31, 2020 are: 10% note payable, maturing 03/31/2021 10,000,000 12% note payable, maturing 06/30/2021 6,000,000 7% guaranteed debentures, due 2024 2,000,000 Additional information: “On January 31, 2021, the entire 10,000,000 note was refinanced through issuance of a long-term obligation payable lump sum. *For the 6,000,000 note, under the loan agreement, the entity has the discretion to refinance the obligation for at least 12 months after December 31, 2020. “The annual sinking fund requirement on the guaranteed debentures is 500,000 per year. *The 2020 financial statements were issued on March 31, 2021. Assuming all accruing interest for 2020 were paid, the amount to be reported as current liabilities on December 31, 2020 is Question 4 2/2pts An analysis of GEORGE Company's liabilities disclosed the following: Accounts payable, net of suppliers’ debit balances of pa50000 3,500,000 Accrued expenses 1,200,000 Customer's credit balances 450,000 Share dividends payable 750,000 Claims for increase in wages by employees of GEORGE covered in a pending suit 200,000 Estimated expenses in redeeming prize coupons 350,000 What amount should be reported as total current liabilities? 5,750,000 5,500,000 Question 5 2/2pts An analysis of Howard Company's liabilities on December 31, 2021 disclosed the following information: amounting to P100,000 and postdated checks of P50,000 Bonds Payable Premium on bonds payable Mortgage payable Share dividends payable Credit balances in customers’ accounts Premiums payable Deferred tax liability Accrued expenses 4,000,000 1,000,000 100,000 850,000 750,000 500,000 600,000 200,000 150,000 The deferred tax liability is based on temporary differences that will reverse in 2022. Total amount of current liabilities in the statement of financial position is: 5,775,000 7,375,000 5,575,000 5,400,000

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