Current Attempt in Progress The following transactions occurred in Wendell Corporation, which has a December 31 year end. 1 2. 3. 4. 5. 6. 7 8. 10. Wendell has received $9,000 from customers in advance (on deposit) for inventory that will be shipped to those customers next year. Wendell signed a five-year, 7%, $200,000 note payable on July 1. The note requires annual instalment payments of $48,778 principal and interest on June 30 each of the next five years. Wendell purchased inventory for $120,000 on December 23 on account, terms n/30, FOB shipping point. The inventory was shipped on December 28 and received by Wendell on January 2. Wendell received $10,000 from customers on December 21 for services to be performed in January. On December 31, Wendell sold inventory for $8,000, plus 13% HST. The cost of goods sold was $5,000. The company uses a perpetual inventory system. Weekly salaries of $18,000 are paid every Friday for a five-day workweek (Monday to Friday). This year, December 31 is a Monday. Payroll deductions for the one day of pay before the end of the year include CPP of $192. El of $57, and employee income tax of $544. Employee benefits to be paid by the employer include CPP of $192 and El of $80. Payroll deductions will be paid on January 15. Wendell is the defendant in a negligence lawsuit. Wendell's legal counsel estimates that it is highly probable that Wendell will lose the suit but is unable to estimate the damages that may need to be paid. After the preparation of its corporate income tax return at year end, Wendell determined that total corporate income tax payable for the year was $50,000, but $45,000 of this amount was paid during the year when the company made tax instalments. Wendell reported non-current bank loans of $250,000 at December 31, of which $30,000 was due within the next year. Wendell has a $100,000 operating line of credit available, on which $10,000 has been drawn. Interest pertaining to the amount drawn on the line of credit has been paid up to December 31. (b) Indicate any information that should be disclosed in the notes to Wendell's financial statements.

Current Attempt in Progress The following transactions occurred in Wendell Corporation, which has a December 31 year end. 1 2. 3. 4. 5. 6. 7 8. 10. Wendell has received $9,000 from customers in advance (on deposit) for inventory that will be shipped to those customers next year. Wendell signed a five-year, 7%, $200,000 note payable on July 1. The note requires annual instalment payments of $48,778 principal and interest on June 30 each of the next five years. Wendell purchased inventory for $120,000 on December 23 on account, terms n/30, FOB shipping point. The inventory was shipped on December 28 and received by Wendell on January 2. Wendell received $10,000 from customers on December 21 for services to be performed in January. On December 31, Wendell sold inventory for $8,000, plus 13% HST. The cost of goods sold was $5,000. The company uses a perpetual inventory system. Weekly salaries of $18,000 are paid every Friday for a five-day workweek (Monday to Friday). This year, December 31 is a Monday. Payroll deductions for the one day of pay before the end of the year include CPP of $192. El of $57, and employee income tax of $544. Employee benefits to be paid by the employer include CPP of $192 and El of $80. Payroll deductions will be paid on January 15. Wendell is the defendant in a negligence lawsuit. Wendell's legal counsel estimates that it is highly probable that Wendell will lose the suit but is unable to estimate the damages that may need to be paid. After the preparation of its corporate income tax return at year end, Wendell determined that total corporate income tax payable for the year was $50,000, but $45,000 of this amount was paid during the year when the company made tax instalments. Wendell reported non-current bank loans of $250,000 at December 31, of which $30,000 was due within the next year. Wendell has a $100,000 operating line of credit available, on which $10,000 has been drawn. Interest pertaining to the amount drawn on the line of credit has been paid up to December 31. (b) Indicate any information that should be disclosed in the notes to Wendell's financial statements.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 24E: Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January...

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