Problem 4-2 – Current and non-current liabilities Grill Company is selling audio and video appliances. The company’s fiscal year ends on March 31. The following information relates to the obligations of the company as of March 31, 2021: Notes Payable Grill 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 April 1, 2022 to March 31, 2023 3,240,000 Total P6,120,000 Estimated warranties Grill Company 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 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: Warranty claims honored on 2019-2020 sales P302,400 Warranty claims honored on 2020-2021 sales 346,000 Total 648,400 Trade payables Accounts payable for suppliers, goods, and services purchases on open account amount to P670,000 as of March 31, 2021. Dividends On March 10, 2021, the company’s board of directors declared a cash dividend of P0.30 per ordinary share and a 10% ordinary share dividend. Both dividends were to be distributed 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 6 million, P2 par value, ordinary shares issued and outstanding. Bonds payable The company issued P6 million, 11% bonds, on October 1, 2015 at 95. The bonds will mature on October 1, 2025. Interest is paid semiannually on October 1 and April 1. The company uses the straight line method to amortize bond discount. Based on the foregoing information, determine the adjusted balances of the following as of March 31, 2021: 1. Estimated warranty payable 2. Unamortized bond discount 3. Bond interest payable 4. Total current liabilities 5. Total noncurrent liabilities
Problem 4-2 – Current and non-current liabilities Grill Company is selling audio and video appliances. The company’s fiscal year ends on March 31. The following information relates to the obligations of the company as of March 31, 2021:
Notes Payable Grill 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
April 1, 2022 to March 31, 2023 3,240,000
Total P6,120,000
Estimated warranties Grill Company 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 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:
Warranty claims honored on 2019-2020 sales P302,400
Warranty claims honored on 2020-2021 sales 346,000
Total 648,400
Trade payables
Accounts payable for suppliers, goods, and services purchases on open account amount to P670,000 as of March 31, 2021.
Dividends
On March 10, 2021, the company’s board of directors declared a cash dividend of P0.30 per ordinary share and a 10% ordinary share dividend. Both dividends were to be distributed 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 6 million, P2 par value, ordinary shares issued and outstanding.
Bonds payable
The company issued P6 million, 11% bonds, on October 1, 2015 at 95. The bonds will mature on October 1, 2025. Interest is paid semiannually on October 1 and April 1. The company uses the
Based on the foregoing information, determine the adjusted balances of the following as of March 31, 2021:
1. Estimated warranty payable
2. Unamortized bond discount
3. Bond interest payable
4. Total current liabilities
5. Total noncurrent liabilities
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