Dell Company is selling sounds and lights equipment. The company's fiscal year ends on March 31. The following information relates to the obligations of the company as of March 31, 2021: Trade payables Accounts payable for suppliers, goods, and services purchases on open account amount to P1,670,000 as of March 31, 2021 before considering of the following items: • On March 31, 2021, the company has a P50,000 debit balance in its accounts payable to a supplier, • The balance also includes an advance payment of P20,000 made by a customer to Dell in • Additional information: resulting from a P50,000 advance payment for goods ordered by the company. anticipation of a purchase to be made by the customer in April 2021. A. Goods were in transit to the company from a vendor on March 31, 2021. The invoice cost was P35.000. The goods were shipped FOB seller on March 29, 2021 and were received on April 4, 2021. B. Goods shipped FOB destination on March 21, 2021, from a vendor to the company were received on March 31, 2021. The invoice cost was P25,000. Payroll Wages and payroll expense amounted to P890,000 for the last payroll period ending on March 31 2021. Additional information are as follows: • Income tax withheld - P100,000 • SSS, PhilHealth, and HDMF Contributions, employee's share • SSS, PhilHealth, and HDMF Contributions, employer's share P10,000 P15,000 Notes Payable Dell Company has signed several long-term notes with financial institutions. The maturities of these notes are given below. The total unpaid interest for all of these notes amounts to P408,000 on March 31, 2021. Due date Amount April 30, 2021 P720,000 July 31, 2021 1,080,000 September 1, 2021 540,000 February 1, 2022* 540,000 ril 1. 2022 to March 31. 2023 3,240,000 Pó,120,000 *With respect to the note due on February 1, 2022, Dell Company has a present unconditional right to defer the payment of the note for another one (1) year from the original maturity date. Estimated warranties Dell Company has a one year product warranty on some selected items. The estimated warranty liability sales made during the 2019 - 2020 fiscal year and still outstanding as of March 31, 2020, amounted to P302,400. The warranty costs on sales made from April 1, 2020 to March 31., 2021, are estimated at P756,000. The actual warranty costs incurred during 2020 to 2021 fiscal year are as follows: P300,000 Warranty claims honored on 2019-2020 sales 345,000 Warranty claims honored on 2020-2021 sales Total 645,000 Note: Unused warranties from prior fiscal year were expired on March 31, 2021. Dividends On March 10, 2021, the company's board of directors declared a cash dividend of PO.20 per ordinary share and a 10% ordinary share dividend. Both dividends were to be istributed on April 5, 2021 to shareholders on record at the close of business on March 31, 2021. As of March 31, 2021, the company has 1 million, P2 par value, ordinary shares issued and 500,000 ordinary shares in treasury. Bonds payable The company issued P6 milion, 11% bonds, on March 31, 2020 when the prevailing rate was 10%. The bonds will mature on March 31, 2025. Interest is paid semiannually on March 31 and September 30. The company uses the effective interest rate method. (Round off present value factors to four decimal places and your final answer to the nearest peso.) Compute for: 3. trade and other payables 6. unamortized bond premium
Dell Company is selling sounds and lights equipment. The company's fiscal year ends on March 31. The following information relates to the obligations of the company as of March 31, 2021: Trade payables Accounts payable for suppliers, goods, and services purchases on open account amount to P1,670,000 as of March 31, 2021 before considering of the following items: • On March 31, 2021, the company has a P50,000 debit balance in its accounts payable to a supplier, • The balance also includes an advance payment of P20,000 made by a customer to Dell in • Additional information: resulting from a P50,000 advance payment for goods ordered by the company. anticipation of a purchase to be made by the customer in April 2021. A. Goods were in transit to the company from a vendor on March 31, 2021. The invoice cost was P35.000. The goods were shipped FOB seller on March 29, 2021 and were received on April 4, 2021. B. Goods shipped FOB destination on March 21, 2021, from a vendor to the company were received on March 31, 2021. The invoice cost was P25,000. Payroll Wages and payroll expense amounted to P890,000 for the last payroll period ending on March 31 2021. Additional information are as follows: • Income tax withheld - P100,000 • SSS, PhilHealth, and HDMF Contributions, employee's share • SSS, PhilHealth, and HDMF Contributions, employer's share P10,000 P15,000 Notes Payable Dell Company has signed several long-term notes with financial institutions. The maturities of these notes are given below. The total unpaid interest for all of these notes amounts to P408,000 on March 31, 2021. Due date Amount April 30, 2021 P720,000 July 31, 2021 1,080,000 September 1, 2021 540,000 February 1, 2022* 540,000 ril 1. 2022 to March 31. 2023 3,240,000 Pó,120,000 *With respect to the note due on February 1, 2022, Dell Company has a present unconditional right to defer the payment of the note for another one (1) year from the original maturity date. Estimated warranties Dell Company has a one year product warranty on some selected items. The estimated warranty liability sales made during the 2019 - 2020 fiscal year and still outstanding as of March 31, 2020, amounted to P302,400. The warranty costs on sales made from April 1, 2020 to March 31., 2021, are estimated at P756,000. The actual warranty costs incurred during 2020 to 2021 fiscal year are as follows: P300,000 Warranty claims honored on 2019-2020 sales 345,000 Warranty claims honored on 2020-2021 sales Total 645,000 Note: Unused warranties from prior fiscal year were expired on March 31, 2021. Dividends On March 10, 2021, the company's board of directors declared a cash dividend of PO.20 per ordinary share and a 10% ordinary share dividend. Both dividends were to be istributed on April 5, 2021 to shareholders on record at the close of business on March 31, 2021. As of March 31, 2021, the company has 1 million, P2 par value, ordinary shares issued and 500,000 ordinary shares in treasury. Bonds payable The company issued P6 milion, 11% bonds, on March 31, 2020 when the prevailing rate was 10%. The bonds will mature on March 31, 2025. Interest is paid semiannually on March 31 and September 30. The company uses the effective interest rate method. (Round off present value factors to four decimal places and your final answer to the nearest peso.) Compute for: 3. trade and other payables 6. unamortized bond premium
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
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 1MC: The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before...
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Question
Dell Company is selling sounds and lights equipment. The company's fiscal year ends on March 31. The
following information relates to the obligations of the company as of March 31, 2021:
Trade payables
Accounts payable for suppliers, goods, and services purchases on open account amount to P1,670,000
as of March 31, 2021 before considering of the following items:
• On March 31, 2021, the company has a P50,000 debit balance in its accounts payable to a supplier,
• The balance also includes an advance payment of P20,000 made by a customer to Dell in
• Additional information:
resulting from a P50,000 advance payment for goods ordered by the company.
anticipation of a purchase to be made by the customer in April 2021.
A. Goods were in transit to the company from a vendor on March 31, 2021. The invoice cost was
P35.000. The goods were shipped FOB seller on March 29, 2021 and were received on April 4,
2021.
B. Goods shipped FOB destination on March 21, 2021, from a vendor to the company were
received on March 31, 2021. The invoice cost was P25,000.
Payroll
Wages and payroll expense amounted to P890,000 for the last payroll period ending on March 31
2021. Additional information are as follows:
• Income tax withheld - P100,000
• SSS, PhilHealth, and HDMF Contributions, employee's share
• SSS, PhilHealth, and HDMF Contributions, employer's share
P10,000
P15,000
Notes Payable
Dell Company has signed several long-term notes with financial institutions. The maturities of these
notes are given below. The total unpaid interest for all of these notes amounts to P408,000 on March
31, 2021.
Due date
Amount
April 30, 2021
P720,000
July 31, 2021
1,080,000
September 1, 2021
540,000
February 1, 2022*
540,000
ril 1. 2022 to March 31. 2023
3,240,000
Pó,120,000
*With respect to the note due on February 1, 2022, Dell Company has a present unconditional right to
defer the payment of the note for another one (1) year from the original maturity date.
Estimated warranties
Dell Company has a one year product warranty on some selected items. The estimated warranty liability
sales made during the 2019 - 2020 fiscal year and still outstanding as of March 31, 2020, amounted
to P302,400. The warranty costs on sales made from April 1, 2020 to March 31., 2021, are estimated at
P756,000. The actual warranty costs incurred during 2020 to 2021 fiscal year are as follows:
P300,000
Warranty claims honored on 2019-2020 sales
345,000
Warranty claims honored on 2020-2021 sales
Total
645,000
Note: Unused warranties from prior fiscal year were expired on March 31, 2021.
Dividends
On March 10, 2021, the company's board of directors declared a cash dividend of PO.20 per ordinary
share and a 10% ordinary share dividend. Both dividends were to be istributed on April 5, 2021 to
shareholders on record at the close of business on March 31, 2021. As of March 31, 2021, the
company has 1 million, P2 par value, ordinary shares issued and 500,000 ordinary shares in treasury.
Bonds payable
The company issued P6 milion, 11% bonds, on March 31, 2020 when the prevailing rate was 10%. The
bonds will mature on March 31, 2025. Interest is paid semiannually on March 31 and September 30.
The company uses the effective interest rate method. (Round off present value factors to four decimal
places and your final answer to the nearest peso.)
Compute for:
3. trade and other payables
6. unamortized bond premium
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