ACC 305 Lecture Notes - Lecture 27: Deferred Tax, Promissory Note, Finance Lease

14 views2 pages

orangegnat648

17 Aug 2019

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Payables and accrued expenses (obligations for goods or services that have been received but not yet paid) Deferred (unearned) revenues (obligations from advance payments from customers for the future delivery of goods or services) Short-term debt and current maturities of long-term debt (short-term financing instruments that will be paid within one year or the operating cycle and the portions of long- term financing instruments that mature during the next period) Long-term liabilities (noncurrent liabilities) obligations that are not expected to settle within one year or the normal operating cycle (whichever is longer) Most are reported at their present value, unless the company elects the fair value option. Interest rates, maturity values, and other provisions are disclosed parenthetically on the balance sheet or in the notes to the financial statements. Long-term accruals include obligations that may be outstanding for many years includinag obligations for pension and other post-employment benefits, estimated liabilities from long-term warranties, and deferred tax liabilities.

Related Questions

Krogh Lumber's 2016 financial statements are shown here.

Krogh Lumber: Balance Sheet as of December 31, 2016 (Thousands of Dollars)
Cash	$1,800	Accounts payable	$7,200
Receivables	10,800	Notes payable	3,472
Inventories	12,600	Accrued liabilities	2,520
Total current assets	$25,200	Total current liabilities	$13,192
		Mortgage bonds	5,000
Net fixed assets	21,600	Common stock	2,000
		Retained earnings	26,608
Total assets	$46,800	Total liabilities and equity	$46,800

Now suppose 2017 sales increase by 25% over 2016 sales. Assume that Krogh cannot sell any fixed assets. All assets other than fixed assets will grow at the same rate as sales; however, after reviewing industry averages, the firm would like to reduce its operating costs/sales ratio to 82% and increase its total liabilities-to-assets ratio to 42%. The firm will maintain its 60% dividend payout ratio, and it currently has 1 million shares outstanding. The firm plans to raise 35% of its 2017 forecasted interest-bearing debt as notes payable, and it will issue bonds for the remainder. The firm forecasts that its before-tax cost of debt (which includes both short- and long-term debt) is 11.5%. Any stock issuances or repurchases will be made at the firm's current stock price of $40. Develop Krogh's projected financial statements. What are the balances of notes payable, bonds, common stock, and retained earnings? Round your answers to the nearest hundredth of thousand of dollars.

Krogh Lumber Pro Forma Balance Statement December 31, 2017 (Thousands of Dollars)

2016

2017

Cash

$1,800

Accounts receivable

10,800

Inventories

12,600

Fixed assets

21,600

Total assets

$46,800

Payables + accruals

$9,720

Short-term bank loans

3,472

Total current liabilities

$13,192

Long-term bonds

5,000

Total debt

$18,192

Common stock

2,000

Retained earnings

26,608

Total common equity

$28,608

Total liab. and equity

$46,800

Using the information below, discuss both the positive andnegative trends presented in the company

Suncor Energy Inc.

Income Statement Horizontal Analysis

For the years ending December X, 2012

And December X, 2013 ($ millions)

	2013	2012	Amount	Variance % Change 2013 from 2012
Revenues and Other Income
Operating revenues, net of royalties	39,593	38,107
Other Income	704	419
	40,297	38,526	1,771	4.60
Expenses
Purchases of crude oil and products	17,293	17,047
Operating, selling and general	9,447	8,897
Transportation	845	685
Depreciation, depletion, amortization and impairment	4,892	6,446
Exploration	332	309
Gain on disposal of assets	(137)	(44)
Project start-up costs	15	60
Voyageur upgrader project charges	82	-
Financing expenses	1,162	142
	33,921	33,542
Earnings before Income Taxes	6,376	4,984	1,392	27,93
Income Taxes
Current	2,083	1,515
Deferred	382	729
	2,465	2,244
Net earnings	3,911	2,740	1,171	42,74
Other Comprehensive Income (loss)
Items that may be subsequently reclassified to Profit orLoss:
Foreign currency translation adjustment	325	(16)
Cash flow hedges reclassified to net earning	-	(1)
Items That will not be reclassified to profit or loss:

Actuarial gain (loss) on employee retirement benefit plans, net of income taxes.	579	(134)
Other comprehensive Income (loss)	904	(151)
Total Comprehensive Income	4,815	2,589	2,226	85.98
Per Common share
Net earnings-basic	2.61	1.77
Net earning-diluted	2.60	1.76
Cash dividends	0.73	0.50

Suncor Energy Inc.

Balance Sheet Horizontal Analysis

For the years ending December X, 2012

And December X, 2013

	2013	2012	Amount	Variance % Change 2013 from 2012
Assets
Current assets
Cash and cash equivalents	5,202	4,385
Accounts receivable	5,254	5,201
Inventories	3,944	3,697
Income taxes receivable	294	799
Total current assets	14,694	14,082
Property, plant and equipment, net	57,270	55,434
Exploration and evaluation	2,772	3,284
Other assets	422	419
Goodwill & other intangible assets	3,092	3,104
Deferred income taxes	65	78
Total assets	78,315	76,401	1,914	2.50
Liabilities and Shareholdersâ Equity
Current liabilities
Short-term debt	798	775
Current portion of long-term debt	457	311
Accounts payable and accrued liabilities	7,090	6,446
Current portion of provisions	998	856
Income taxes payable	1,263	1,165
Total current liabilities	10,606	9,553
Long-term debt	10,203	9,938
Other long-term liabilities	1,464	2,319
Provisions	4,078	4,932
Deferred income taxes	10,784	10,444
Total liabilities	37,135	37,186	-51	-0.14
Stockholderâs equity	41,180	39,215	1,965	5.01
Total liabilities and equity	78,315	76,401	1,915	2.50 See More from Todd Young

Using the financial statements below,please calculate thefollowing

The current position of each company,

The market value of each company,

The amount of profit generated by each dollar ofassets or equity,

How much debt is involved in each company compared to equity,and

How solvent each business is.

THE PEOPLESâ CREDIT UNION LIMITED

Financial statements for THE PEOPLESâ CREDIT UNION LIMITD) forthe year ended December 31, 2017.

Each share costs $5.00

The dividend paid was 3.75%

	December 31, 2017
Cash Resources:
Cash in hand and at bank	11,961,005
Short-term investments	71,000,511
Total cash resources	82,691,516

Other Assets:
Accounts receivable and prepayments	2,738,666
Net loans to members	343,075,646
Long-term investments	71,513,400
Fixed assets	29,202,515
Total Assets	529,221,743

Liabilities:
Accounts payable and accruals	7,800,932
Membersâ deposit savings	34,623,468
Membersâ time deposits (fixed deposits)	90,629,600
Provision for terminal benefits	5,303,180
Retirement benefit obligations	638,200
Membersâ share savings	324,230,903
Total liabilities	463,226,283

Institutional Capital:
Reserve fund	22,992,421
Education fund	1,446,107
Loan protection fund	836,726
Building fund	12,250,000
Investment re-measurement reserve	15,266,397
Undivided earnings	13,203,809
Total institutional capital	65,995,460
Total Liabilities and Institutional Capital	529,221,743

	For the year ended December 31 2017
Income:
Interest on loans	37,358,266
Investment income (net)	2,020,571
Other income	1,262,899
Total Income	40,671,736

Expenditure:
Administrative expenses	7,956,429
Board and committeesâ expenses	1,072,631
Life saving insurance	866,002
Loan protection expense	1,716,236
Loan loss expense	129,286
Interest on membersâ expense	2,170,128
Members education, training and development expenses	1,636,889
Personnel costs	10,635,898
Total expenditure	26,183,499
Net surplus for the year	14,458,237

Other comprehensive income
Items that may be re-classified later as profit or loss
Unrealised (loss)/gain on available-for-sale financialassets	974,380
Items that may be re-classified later as profit or loss
Net actuarial (loss)/gain on retirement benefit obligations	(294,500)
	679,880
Total Comprehensive Income for the year	15,138,117

	Reserve fund	Education fund	Loan protection fund	Building fund	Investment re-measurement fund	Undivided earnings
Balance as at January 1, 2017	21,523,987	1,170,891	711,676	11,500,000	14,292,017	11,819,316
Total comprehensive income for the year					974,380	14,163,737
Appropriation of net surplus for the year:
10 % to the Reserve Fund	1,416,374					(1,416,374)
13.5% to the Education Fund		1,912,105				(1,912,105)
13% to the Loan Protection Fund			1,841,286			(1,841,286)
	22,940,361	3,082,996	2,552,962	11,500,000	15,266,397	20,813,288
Add/(less) adjustments as follows:
Dividends (2016)						(10,160,544)
Entrance fees	52,060					(52,060)
Member education, training and development expenses		(1,636,889)				1,636,889
Transfer to Building Fund				750,000		(750,000)
Loan protection expense			(1,716,236)			1,716,236
Balance as at December 31, 2017	22,992,421	1,446,107	836,726	12,250,000	15,266,397	13,203,809

ceruleanbear388

ACC 305 Lecture Notes - Lecture 27: Deferred Tax, Promissory Note, Finance Lease

Document Summary

Get access

Related Documents

ACC 305 Lecture Notes - Lecture 26: Deferred Tax, Historical Cost, Current Liability

ACC 305 Lecture Notes - Lecture 5: Income Statement, Financial Statement, Retained Earnings

ACC 305 Lecture Notes - Lecture 24: Current Liability, Retained Earnings, Historical Cost

Related Questions