Generally Acknowledged Accounting Guidelines and Immediate Borrowings

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31.08.2019-13 views -Generally Accepted

 Generally Accepted Accounting Rules and Initial Borrowings Essay

Break question – Chapter 13, lecture #1

Wilk Company. reported the subsequent liabilities at December thirty-one of the current year:

Accounts Payable – trade 750, 000

Initial borrowings 500, 000

Bank loan, current portion $100, 0003, 500, 1000

Other bank loan1, 000, 000

Your bank loan of $3, 500, 000 was at violation of the loan agreement. The lender had not waived the privileges for the loan. Half the other mortgage will older on 06 30 next year, and the other half in the year following. Interest on the other bank loan can be not included inside the above characters. Interest of $75, 500 was paid out on 06 30 with the prior yr along with an sequel on the financial loan principal, and interest of $50, 000 will be paid out with the next installment upon June 30 next year. What amount ought to Wilk report as current liabilities at December thirty-one this year?

a. $1, two hundred and fifty, 000

w. $4, 650, 000

c. $5, a hundred seventy five, 000

d. $5, 700, 000

Answer:

The A/P and short-term borrowings are current, and because the $3. 5M bank loan is violation of your loan dotacion (and the creditor have not waived his rights), the full $3. 5M is due and a current the liability.

Of the $1 M loan from the bank, interest which includes accrued between June 35 last year and December 31 also needs to be shown as a current responsibility, along with the $500, 000 principal payment (1/2 the $1 million).

The total fascination is $50, 000, nevertheless only ½ of that provides accrued between July one of the current yr and 12 , 31, so another $25, 000 ought to be included as a current liability as of Dec 31. The eye rate is definitely 5% (but that wasn't part of the required).

750, 000 + 4 hundred, 000 & 3, 500, 000 & 500, 000 + 25, 000 sama dengan $5, 175, 000 (C)

Break problem – Section 13, address #2

During January of the current yr, Haze Corp. won a litigation honor of $15, 000 that has been tripled to $45, 000 to include punitive damages. The defendant, who will be financially secure, has become a huge hit only the $30, 000 of punitive damages. Haze was awarded $55, 000 in...

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