HALABATGANON CORP. has been producing quality disposable diapers for more than two decades. The company’s fiscal year runs from April 1 to March 31. The following information relates to the obligations of HALABATGANON as of March 31, 2012. Bonds Payable HALABATGANON issued P10,000,000 of 10% bonds on July 1, 2010. The prevailing market rate of interest for these bonds was 12% on the date of issue. The bonds will mature on July 1, 2020. Interest is paid semiannually on July 1 and January 1. HALABATGANON uses the effective interest rate method to amortize bond premium or discount. The following present value factors are taken from the present value tables: Present value of 1 at 12% for 10 periods 0.32917 Present value of 1 at 6% for 20 periods 0.31180 Present value of an annuity of 1 at 12% for 10 periods 5.65022 Present value of an ordinary annuity of 1 at 6% for 20 periods11.46992 Notes Payable HALABATGANON has signed several long-term notes with financial institutions. The maturities of these notes are given in the schedule below. The total unpaid interest for all these notes amounts to P600,000 on March 31, 2012. Due Date Amount Due Aril 1, 2012 P 400,000 July 1, 2012 600,000 October 1, 2012 300,000 January 1, 2013 300,000 April 1, 2013 − March 31, 2014 1,200,000 April 1, 2014 − March 31, 2015 1,000,000 April 1, 2015 − March 31, 2016 1,400,000 April 1, 2016 − March 31, 2017 800,000 April 1, 2017 − March 31, 2018 1,000,000 Estimated Warranties HALABATGANON has a one-year product warranty on some selected items in its product line. The estimated warranty liability on sales made during the 2010 – 2011 fiscal year and still outstanding as of March 31, 2011 amounted to P180,000. The warranty costs on sales made from April 1, 2011, through March 31, 2012, are estimated at P520,000. The actual warranty costs incurred during the current 2011 – 2012 fiscal year are as follows: Warranty claims honored on 2010 – 2011 sales P 180,000 Warranty claims honored on 2011 – 2012 sales 178,000 Total warranty claims honored P 358,000 Other Information. TRADE PAYABLES Accounts payable for supplies, goods and services purchased on open account amount to P740,000 as of March 31, 2012. PAYROLL RELATED ITEMS Accrued salaries and wages P 300,000 Withholding waxes payable 94,000 Other payroll deductions 10,000 Total P 404,000 MISCELLANEOUS ACCRUALS Other accruals not separately classified amount to P150,000 as of March 31, 2012. DIVIDENDS On March 15, 2012, HALABATGANON’s board of directors declared a cash dividend of P0.20 per ordinary share and a 10% share dividend. Both dividends were to be distributed on April 12, 2012, to the shareholders of record at the close of business on March 31, 2012. Data regarding HALABATGANON ordinary share capital are as follows: Par value P 5.00 per share Number of shares issued and outstanding 6,000,000shares Market values of ordinary shares: March 15, 2012 P22.00 per share March 31, 2012 21.50 per share April 12, 2012 22.50 per share 1. How much was received by HALABATGANON from the sale of the bonds on July 1, 2010?
HALABATGANON CORP. has been producing quality disposable diapers for more than two decades. The company’s fiscal year runs from April 1 to March 31. The following information relates to the obligations of HALABATGANON as of March 31, 2012.
Bonds Payable
HALABATGANON issued P10,000,000 of 10% bonds on July 1, 2010. The prevailing market rate of interest for these bonds was 12% on the date of issue. The bonds will mature on July 1, 2020. Interest is paid semiannually on July 1 and January 1. HALABATGANON uses the effective interest rate method to amortize bond premium or discount.
The following present value factors are taken from the present value tables:
Present value of 1 at 12% for 10 periods 0.32917
Present value of 1 at 6% for 20 periods 0.31180
Present value of an annuity of 1 at 12% for 10 periods 5.65022
Present value of an ordinary annuity of 1 at 6% for 20 periods11.46992
Notes Payable
HALABATGANON has signed several long-term notes with financial institutions. The maturities of these notes are given in the schedule below. The total unpaid interest for all these notes amounts to P600,000 on March 31, 2012.
Due Date Amount Due
Aril 1, 2012 P 400,000
July 1, 2012 600,000
October 1, 2012 300,000
January 1, 2013 300,000
April 1, 2013 − March 31, 2014 1,200,000
April 1, 2014 − March 31, 2015 1,000,000
April 1, 2015 − March 31, 2016 1,400,000
April 1, 2016 − March 31, 2017 800,000
April 1, 2017 − March 31, 2018 1,000,000
Estimated Warranties
HALABATGANON has a one-year product warranty on some selected items in its product line. The estimated warranty liability on sales made during the 2010 – 2011 fiscal year and still outstanding as of March 31, 2011 amounted to P180,000. The warranty costs on sales made from April 1, 2011, through March 31, 2012, are estimated at P520,000. The actual warranty costs incurred during the current 2011 – 2012 fiscal year are as follows:
Warranty claims honored on 2010 – 2011 sales P 180,000
Warranty claims honored on 2011 – 2012 sales 178,000
Total warranty claims honored P 358,000
Other Information.
TRADE PAYABLES
Accounts payable for supplies, goods and services purchased on open account amount to P740,000 as of March 31, 2012.
PAYROLL RELATED ITEMS
Accrued salaries and wages P 300,000
Withholding waxes payable 94,000
Other payroll deductions 10,000
Total P 404,000
MISCELLANEOUS ACCRUALS
Other accruals not separately classified amount to P150,000 as of March 31, 2012.
DIVIDENDS
On March 15, 2012, HALABATGANON’s board of directors declared a cash dividend of P0.20 per ordinary share and a 10% share dividend. Both dividends were to be distributed on April 12, 2012, to the shareholders of record at the close of business on March 31, 2012. Data regarding HALABATGANON ordinary share capital are as follows:
Par value P 5.00 per share
Number of shares issued and outstanding 6,000,000shares
Market values of ordinary shares:
March 15, 2012 P22.00 per share
March 31, 2012 21.50 per share
April 12, 2012 22.50 per share
1.
How much was received by HALABATGANON from the sale of the bonds on July 1, 2010?
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