Abam Corporation is selling audio and video appliances. The company’s fiscal year ends on March 31. The following information relates the obligations of the company as of March 31, 2004. Notes payable Abam 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 amount to P340,000 on March 31, 2004. Due date Amount April 31, 2004 P 600,000 July 31, 2004 900,000 September 1, 2004 450,000 February 1, 2005 450,000 April 1, 2005- March 31, 2008 2,700,000 P5,100,000 Estimated warranties: Abam has one year product warranty on some selected items. The estimated warranty liability on sales made during the 2002- 2003 fiscal year and still outstanding as of March 31, 2003, amounted to P252,000. The warranty costs on sales made from April 1, 2003 to March 31, 2004 are estimated at P630,000. The actual warranty costs incurred during 2003- 2004 fiscal year as follows: Warranty claims honored on 2002- 2003 P252,000 Warranty claims honored on 2003- 2004 sales 285,000 Total P537,000 Trade payables Accounts payable for supplies, goods and services purchases on open account amount to P560,000 as of March 31, 2004. Dividends On march 10, 2004, Abam’s board of directors declared a cash dividend of P0.30 per common share and a 10% common stock dividend. Both dividends were to be distributed on Aptil 5, 2004 to common stockholders on record at the close of business on March 31, 2004. As of March 31, 2004, NDKC has 5 million, P2 par value common stock shares issued and outstanding. Bonds payable NDKC issued P5,000,000, 12% bonds, on October 1, 1998 at 96. The bonds will mature on October 1, 2008. Interest is paid semi- annually on October 1 and April 1. NDKC uses straight line method to amortize bond discount. Based on the forgoing information, determine the adjusted balances of the following as of March 31, 2004: 17. Estimated warranty payable a. P252,000 b. P345,000 c. P630,000 d. P882,000 18. Unamortized bond discount a. P110,000 b. P200,000 c. P100,000 d. P90,000 19. Bond interest payable a. P0 b. P300,000 c. P150,000 d. P250,000 20. Total current liabilities a. P6,445,000 b. P5,105,000 c. P5,445,000 d. P3,945,000 21. Total noncurrent liabilities a. P7,700,000 b. P7,590,000 c. P7,500,000 d. P7,610,000
Abam Corporation is selling audio and video appliances. The company’s fiscal year ends on
March 31. The following information relates the obligations of the company as of March 31,
2004.
Notes payable
Abam 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 amount to P340,000
on March 31, 2004.
Due date Amount
April 31, 2004 P 600,000
July 31, 2004 900,000
September 1, 2004 450,000
February 1, 2005 450,000
April 1, 2005- March 31, 2008 2,700,000
P5,100,000
Estimated warranties:
Abam has one year product warranty on some selected items. The estimated warranty
liability on sales made during the 2002- 2003 fiscal year and still outstanding as of March
31, 2003, amounted to P252,000. The warranty costs on sales made from April 1, 2003 to
March 31, 2004 are estimated at P630,000. The actual warranty costs incurred during 2003-
2004 fiscal year as follows:
Warranty claims honored on 2002- 2003 P252,000
Warranty claims honored on 2003- 2004 sales 285,000
Total P537,000
Trade payables
Accounts payable for supplies, goods and services purchases on open account amount to
P560,000 as of March 31, 2004.
Dividends
On march 10, 2004, Abam’s board of directors declared a cash dividend of P0.30 per
common share and a 10% common stock dividend. Both dividends were to be distributed on
Aptil 5, 2004 to common stockholders on record at the close of business on March 31, 2004.
As of March 31, 2004, NDKC has 5 million, P2 par value common stock shares issued and
outstanding.
Bonds payable
NDKC issued P5,000,000, 12% bonds, on October 1, 1998 at 96. The bonds will mature on
October 1, 2008. Interest is paid semi- annually on October 1 and April 1. NDKC uses
straight line method to amortize bond discount.
Based on the forgoing information, determine the adjusted balances of the following as of
March 31, 2004:
17. Estimated warranty payable
a. P252,000 b. P345,000 c. P630,000 d. P882,000
18. Unamortized bond discount
a. P110,000 b. P200,000 c. P100,000 d. P90,000
19. Bond interest payable
a. P0 b. P300,000 c. P150,000 d. P250,000
20. Total current liabilities
a. P6,445,000 b. P5,105,000 c. P5,445,000 d. P3,945,000
21. Total noncurrent liabilities
a. P7,700,000 b. P7,590,000 c. P7,500,000 d. P7,610,000
Step by step
Solved in 2 steps
20. Total current liabilities
a. P6,445,000 b. P5,105,000 c. P5,445,000 d. P3,945,000
21. Total noncurrent liabilities
a. P7,700,000 b. P7,590,000 c. P7,500,000 d. P7,610,000
by Bartleby Expert
