AFM123 Lecture Notes - Promissory Note, Accounts Payable, Current Liability

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maroonseal566

3 Mar 2014

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM123

Professor

Peter Blake

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Document Summary

Borrow 000 000 from bank to be repaid in equal annual installments over 5 years (i. e. 000 to be repaid at end of each year: receive cash; pay back in 30 days, entry today: Cr notes payable : entry in 30 days: Cr loan payable 000 000: 1st month"s interest. Cr cash or interest payable: when repay at year end: Sign a promissory note for due in 30 days plus interest at 12% per annum. Interest in charged and owed as time passes. Example: on september 1st, abc corp. signs a 6 month promissory note for 000 + interest at 6% per annum, year-end date december 31 (balance sheet date) for interest. Legally, they owe 000 + 4 months interest therefore they must record liability. On december 31, owe 000 x 6% x 4/12 = .

Related Questions

on 1st april2017 prentice acquired 60% of the equity sharecapital of sontic in a share exchange of two shares in prentice forthree in sontic.the issue of shares has not yet been recorded byprentice at the date of acquisition,shares in prentice had a marketvalue of $6 each. below are summerised draft financial statement ofboth companies.

statement of profit or loss for the year ended 30 September2017

prentice sontic

$000 $000

revenue 85000 42000

cost of sales 63000 32000

gross profit 22000 10000

distribution costs (2000) (2000)

administration costs (6000) (3200)

finace costs (300) (400)

profit before tax 13700 4400

income tax (4700) (1400)

profit after tax 9000 3000

statement of financial position as at 30th September 2017

ASSETS

non current assets 40600 12600

property plant &equip 16000 6000

total current assets 56600 19200

EQUITY AND LIABILITIES

equity shares of $1 10000 4000

returned earnings 35400 6500

total 45400 6500

NON CURRENT LIABILITIES

10% loan notes 3000 4000

current liabilities 8200 4700

total equity 56600 19200

the following information is relevant:

1. at the date of acquisition, the fair value of sontic's assetswere equal to their carrying amounts with the exception of an itemof plant which had a fair value of $2 million in excess of itscarrying amount. it had a remaining life of five years at the date(straight line method depreciation is used) sontic has not adjustedthe carrying amount of its plant as a result of the fair valueexercise

2.sales from pretice in the post acquisition period were $8million sontic made a mark up on cost of 40% on these sales.prentice had sold $5.2 million (at cost to prentice)of these goodsby 30 September 2017. 3. sontic's trade receivables at 30 September2008 include $600000 due from prentic which did not agree withprentic's corresponding trade payables. this was due to cash intransit of $200000 from prentice to sontic, both companies havepositive bank balance

3.other than where indicated , statement of profit or loss itemsare deemed to accrue evenly on a time basis 5. prentice has apolicy of accounting for any non controlling interest at fair value. the fair value of the non controlling interest at the acquisitiondate was $5.9 million

REQUIRED

(a) prepare the consolidated statement of profit or loss forprentice for the year ended 30 September 2017

(b)prepare the consolidated statement of financial position asat 30 sept 2017

erinlouse173

NEED ALL 5 PARTS thanks..

Required information

Problem 11-1A Short-term notes payable transactions and entries LO P1

[The following information applies to the questions displayed below.]

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

Apr.	20	Purchased $35,500 of merchandise on credit from Locust, terms n/30. Tyrell uses the perpetual inventory system.
May	19	Replaced the April 20 account payable to Locust with a 90-day, $35,000 note bearing 7% annual interest along with paying $500 in cash.
July	8	Borrowed $60,000 cash from NBR Bank by signing a 120-day, 10% interest-bearing note with a face value of $60,000.
__?__		Paid the amount due on the note to Locust at the maturity date.
__?__		Paid the amount due on the note to NBR Bank at the maturity date.
Nov.	28	Borrowed $27,000 cash from Fargo Bank by signing a 60-day, 7% interest-bearing note with a face value of $27,000.
Dec.	31	Recorded an adjusting entry for accrued interest on the note to Fargo Bank.

2017

__?__

Paid the amount due on the note to Fargo Bank at the maturity date.

Problem 11-1A Part 1

Required:
1. Determine the maturity date for each of the three notes described.

Problem 11-1A Part 2

2. Determine the interest due at maturity for each of the three notes. (Do not round your intermediate calculations. Use 360 days a year.)

Problem 11-1A Part 3

3. Determine the interest expense to be recorded in the adjusting entry at the end of 2016. (Do not round your intermediate calculations. Use 360 days a year.)

Problem 11-1A Part 4

4. Determine the interest expense to be recorded in 2017. (Do not round intermediate calculations and round your final answers to nearest whole dollar. Use 360 days a year.)

Problem 11-1A Part 5

5.1 Prepare journal entries for all the preceding transactions and events for 2016. (Do not round your intermediate calculations.)

rosecattle833

[The following information applies to the questions displayed below.]Tytus Co. entered into the following transactions involving short-term liabilities in 2010 and 2011. 2010Apr. 20 Purchased $37,000 of merchandise on credit from Frier, terms are 1/10, n/30. Tytus uses the perpetual inventory system.May 19 Replaced the April 20 account payable to Frier with a 90-day, $30,000 note bearing 9% annual interest along with paying $7,000 in cash.July 8 Borrowed $51,000 cash from Community Bank by signing a 120-day, 12% interest-bearing note with a face value of $51,000.__?__ Paid the amount due on the note to Frier at the maturity date.__?__ Paid the amount due on the note to Community Bank at the maturity date.Nov. 28 Borrowed $33,000 cash from UMB Bank by signing a 60-day, 7% interest-bearing note with a face value of $33,000.Dec. 31 Recorded an adjusting entry for accrued interest on the note to UMB Bank. 2011__?__ Paid the amount due on the note to UMB Bank at the maturity date. 1.value:15.00 points Required:1. Determine the maturity date for each of the three notes described.FrierCom. BankUMB Maturity date2.Determine the interest due at maturity for each of the three notes. (Use 360 days a year. Do not round your intermediate calculations. Omit the "$" sign in your response.)FrierCom. BankUMB Interest due at maturity$ $ $

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AFM123 Lecture Notes - Promissory Note, Accounts Payable, Current Liability

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