p. has been producing quality disposable diapers for more than two decades. Your audit of the company’s financial statements for the year ended December 1, 2020, discloses the following debt obligations of the company at the end of its reporting period. (Round present value factors up to five decimal places) BONDS PAYABLE COMELEC issued P7,500,000 of 8% bonds on June 1, 2021. The prevailing market rate of interest for these bonds was 14% on the date of issue. The bonds will mature on June 1, 2031. Interest is paid semiannually on July 1 and January 1. COMELEC uses the effective interest rate method to amortize bond premium or discount. NOTES PAYABLE COMELEC 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 P450,000 on December 1,2021. Due Date Amount
COMELEC Corp. has been producing quality disposable diapers for more than two decades. Your audit of the company’s financial statements for the year ended December 1, 2020, discloses the following debt obligations of the company at the end of its reporting period. (Round present value factors up to five decimal places)
BONDS PAYABLE
COMELEC issued P7,500,000 of 8% bonds on June 1, 2021. The prevailing market rate of interest for these bonds was 14% on the date of issue. The bonds will mature on June 1, 2031. Interest is paid semiannually on July 1 and January 1. COMELEC uses the effective interest rate method to amortize bond premium or discount.
NOTES PAYABLE
COMELEC 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 P450,000 on December 1,2021.
Due Date Amount Date
November 30, 2020 P550,000
January 15, 2021 730,000
August 1, 2021 335,000
February 14, 2022 143,000
December 5, 2022 302,400
November 30, 2015 – December 1, 2023 1,200,000
November 30, 2016 – December 1, 2024 1,000,000
November 30, 2017 – December 1, 2025 1,400,000
November 30, 2018 – December 1, 2026 800,000
November 30, 2019 – December 1, 2027 1,000,000
ESTIMATED WARRANTIES
COMELEC has a one-year product warranty on some selected items. The estimated warranty liability on sales made during the 2019-2020 fiscal year and still outstanding as of December 1,2020, amounted to P302,400. The warranty costs on sales made from December 2, 2020, through December 1, 2021, are estimated at P408,000.The actual warranty costs incurred during the current 2020-2021 fiscal year are as follows:
Warranty claims honored on 2019-2020 sales P302,400
Warranty claims honored on 2020-2021 sales 342,400
OTHER INFORMATION
- TRADE PAYABLES
Accounts payable for supplies, goods and services purchased on open account amount to P850,000 as of December 1, 2021.
2. PAYROLL RELATED ITEMS
Accrued salaries and wages P275,000
Withholding taxes payable 87,000
Other payroll deductions 18,000
3. MISCELLAENEOUS ACCRUALS
Other accruals not separately classified amount to P175,000 as of November 27, 2021.
4. DIVIDENDS
On November 15, 2021, COMELEC’s board of directors declared a cash dividend of P0.35 per ordinary share and a 10% share dividend. Both dividends were to be distributed on January 7, 2021, to the shareholders of record at the close of business on December 1, 2021. Data regarding COMELEC ordinary share capital are as follows:
Par Value P7 per share
Number of shares 4,500,000 shares
Market values of ordinary shares:
November 15, 2021 P18.00 per share
December 1, 2021 19.50 per share
January 7, 2012 20.50 per share
- How much was received by COMELEC from the sale of the bonds on June 1, 2021?
- What is the current portion of COMELEC’s notes payable at December 1, 2021?
- The balance estimated warranties payable at December 1, 2021, is
- On December 1, 2021, COMELEC’s
statement of financial position would report total current liabilities of - On December 1, 2021, COMELEC’s statement of financial position would report total noncurrent liabilities of
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