Which of the following modification of terms will not qualif, for derecognition of financial liability?
Q: What disclosure is made if a loss contingency is reasonably possible?
A: Contingent Liability: Contingent liability is one form of liability that arises based on a…
Q: State with reason whether the following statements are true or false Contingent liability is an…
A: Contingent liability can be defined as the liability that may occur on the basis of the outcome of…
Q: resent obligation is not a contingent liability but shall be recognized as a provision when * a.…
A: Solution: Contingent liability is the liability which depends on the results of any future event…
Q: What evidence is necessary to demonstrate the ability to defer settlement of short-term debt?
A: Short-term debt: Short-term debt refers to the current liability of an organization. This means that…
Q: Which of the following is not considered a characteristic of a liability? O Present obligation. O…
A: Liability means the amount which is to be paid to an outsider by business. It is the present…
Q: The recognition of certain nonfinancial liabilities (e.g., contingencies and environmental…
A: Provision is recognized for uncertain amounts and timings. Therefore, the meaning of probable is…
Q: Which of the following best describes a contingent liability that is unlikely to occur?A. remoteB.…
A: Contingent liabilities are those liabilities that will occur on the basis of future events. These…
Q: what conditions are not necessary to exclude a short term obligation from current liabilities?
A: Current liabilities: It refers to short term financial obligations that are to be discharged within…
Q: A provision may be the equivalent of an estimated liability or a loss contingency that is accrued…
A: In this question we will understand that how a provision may be equivalent of an estimated liability…
Q: Define a “liability” by listing its essential characteristics (not types of) as provided by our…
A: Liability :— It is a Financial obligation that is to be settled in the future date. Suppose an…
Q: Which of the following would not be considered a general long term liability? Select one: a. Long…
A: Short term obligations are the obligations that have to be paid within a year. whereas, long term…
Q: Deductibles are not used in which of the following type of insurance?
A: Deductibles in insurance: The deductibles is an expense the insured have to pay in before the time…
Q: What are the short-term effect and the long-term effect of improperly capitalizing expenditures on…
A: Financial statements are prepared by the company to present its financial position at a given point…
Q: Which of the following statements is false?a. A contingent liability should be disclosed in the…
A: A contingent liability is a liability which occurrence is depending on the outcome of a uncertain…
Q: What is the difference between equity of redemption and statutory redemption?
A: The difference between equity of redemption and statutory redemption are:
Q: the stakeholders position is not protected by a contract -unlike the provider of debt- how is it in…
A: Shareholders are the individuals who get ownership of the organization when they invest in their…
Q: Why is the distinction between a conditional and unconditional contribution important for accounting…
A: Step 1 The main difference between conditional and non-conditional contributions is that to…
Q: Which of the following is not an essential characteristic of a liabili O All are essential…
A: Liabilities are those present obligations that are due to business and they could be short-term in…
Q: RUE OR FLASE? The effect of a lender agreeing to give the borrowing entity a grace period within…
A: Non Current Liability are long term liabilities where their payment is due 12 months after the…
Q: 1. Which of the following is not an essential characteristic of a liability? * a. It is a present…
A: Liabilities may he defined as existing obligations which a business enterprise intends to meet in…
Q: The accrual of a contingent liability and the related loss should be recorded when the a. Loss…
A: Accrued liability are refer as when probability of occurrence of the loss contingency is probable…
Q: A provision is an existing liability of uncertain timing and uncertain amount True False
A: Introduction:- Provisions express funds put separately by a company to cover anticipated losses in…
Q: Is the nature of the gainor loss considered ordinary or long-term?
A: Ordinary gain or loss means any income which doesn't result as Capital gain or loss. Capital Gain or…
Q: Which of the following liabilities would be considered nonrecourse?
A: "As the student have not been given the options to choose the nonrecourse liabilities, I will give…
Q: How do U.S. GAAP and IFRS differ in their treatment of a range of equally likely losses?
A: Loss contingency: Loss contingency is a contingency where the existing situations or circumstances…
Q: How are deductions and losses different? How are they similar? Explain
A: Deductions: As deductions, the existing expenses made for the development of current period profits…
Q: Under what circumstances is a contingent liability reflected in the accounting records as though an…
A: Contingent liability: Liability that can occur in future depending on the outcome of an uncertain…
Q: Which of the following is not a ground for the extinguishment of an obligation? O Condonation or…
A: Following is the correct answer
Q: In explaining the meaning of obligation in the definition of a liability, the Conceptual Framework…
A: when a liability arises to pay the amount than obligations will arise.
Q: What are the arguments for giving separate accountingrecognition to the conversion feature of…
A: The separate accounting for recognition is needed as convertible debenture has the feature of…
Q: 1. Which of the following modification of terms will not qualify for derecognition of financial…
A: Solution Concept Derecognition of financial liability A financial liability is derecognized when the…
Q: Which among the following suits best for Unearned revenue? a. Liability b. Expense c. Revenue d.…
A: Unearned Revenue: Unearned Revenue means money received from the customer in advance for the service…
Q: How might exclusion clauses be found to be unenforceable?
A: Exclusion clause is defined as the term of contract that looks for restricting or excluding the…
Q: Under IFRS, a provision is the same as: a. a contingent liability. b. an estimated liability. c.…
A:
Q: Provide some examples of items that would be adjusted directly against equity, rather than being…
A: Shareholder's equity: The amount remaining after subtracting company long term and short term…
Q: Define contingent liability. What is the criteria to determine whether or not to report the…
A: Liability means the obligation to pay to the other parties by transferring the economic benefits…
Q: Under what circumstances should a loss contingency be accrued?
A: Loss contingency: Loss contingency is contingency where existing situation or circumstances where…
Q: n the case of a non-adjusting event, IAS 10 requires it to be: Select one alternative: disclosed…
A: Solution: In the case of a non-adjusting event, IAS 10 requires it to be "disclosed by way of note…
Step by step
Solved in 2 steps
- 1. Which of the following modification of terms will not qualify for derecognition of financial liability? * a. A P1,000,000 bonds payable was due for payment on September 01, 2019. The maturity date has been extended up to September 01, 2020 with the face amount still the same. b. The market rate of interest associated with 2,500 bonds was 10% when these bonds were sold. Present value of the bonds was computed based on this percentage. Months later, prices in the market significantly changed making a shift from 10% to 11.5% effective rate. c. P375,000 of interest that accrued from the last date of interest payment up to the present time has been condoned or forgiven. The face amount though of P5,000,000 is unchanged and would be paid at the original date stated on the bond indentures. d. A previous P2,000,000 bonds was replaced by another bond payable of the same amount but with a different nominal rate of 9% instead of the old 11% rate.If the bonds are retired on January 1, 2021, at 103, what will SIGE NA report as a loss on redemption? *see attached a. P 250,000b. P 365,000c. P 400,000d. P 425,000Which of the following debt should be classified as a current liability on December 31, 2020 in the Company's balance sheet? A. $24 million of 6% bonds were issued for $24 million on May 31, 1999. The bonds mature on May 31, 2029, but bondholders have the option of calling (demanding payment on) the bonds on May 31, 2021. However, the option to call is not expected to be exercised, given prevailing market conditions. B. Blues Company borrowed $100,000 through a 7% note payable dated December 31, 2016. Interest is due annually on December 31, and the principal is due on December 31 2021. The note will be paid on December 31, 2021, with amounts Blues Company accumulated in a long-term investment fund classified as a long-term asset. a. B only. b. Neither A nor B c. A only.
- On July 01, 2019, SALUDO RAW SA'YO SI MAGELLAN SABI NI LOLA CO. received P1,032,880 for P1,000,000 face amount, 12% bonds, a price that yields 10%. Using the interest method of amortization, how much is the interest expense for the six months ended December 31, 2019? Use the same information in MC 18. What is the bond carrying value at December 31, 2019? a. P1,024,524 b. P1,031,236 c. P1,032,880 d. P1,041,236Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Increase inCarrying Value CarryingValue 01/01/2021 331,652 06/30/2021 10,500 13,266 2,766 334,418 12/31/2021 10,500 13,377 2,877 337,295 06/30/2022 10,500 13,492 2,992 340,287 12/31/2022 10,500 13,611 3,111 343,398 06/30/2023 10,500 13,736 3,236 346,634 12/31/2023 10,500 13,866 3,366 350,000 What is the annual market interest rate on the bonds? (Hint: Be sure to provide the annual rate rather than the six-month rate.) (Do not round your intermediate calculations.) Multiple Choice 6%. 3%. 7%. 8%.Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Increase inCarrying Value CarryingValue 01/01/2021 332,789 06/30/2021 17,500 19,967 2,467 335,256 12/31/2021 17,500 20,115 2,615 337,871 06/30/2022 17,500 20,272 2,772 340,643 12/31/2022 17,500 20,439 2,939 343,582 06/30/2023 17,500 20,615 3,115 346,697 12/31/2023 17,500 20,803 3,303 350,000 THA issued the bonds for: Multiple Choice $350,000. $332,789. $455,000. Cannot be determined from the given information.
- On January 1, 2019, Assarain Concrete issued bonds with a face value of OMR 100,000 at 97, due in January 1, 2029. On January 1, 2025, the entire issue was retired at 100 and cancelled. How much is the gain or loss from retirement of bonds? a. Loss RO 900 b. Loss RO 1,200 c. Gain RO 1,200 d. Gain RO 900Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity: Date Cashinterest Effectiveinterest Decrease inbalance Outstandingbalance 1/1/2021 $ 207,020 6/30/2021 $ 7,000 $ 6,211 $ 789 206,230 12/31/2021 7,000 6,187 813 205,417 6/30/2022 7,000 6,163 837 204,580 12/31/2022 7,000 6,137 863 203,717 6/30/2023 7,000 6,112 888 202,829 12/31/2023 7,000 6,085 915 201,913 6/30/2024 7,000 6,057 943 200,971 12/31/2024 7,000 6,029 971 200,000 What is the annual effective interest rate on the bonds?On January 1, 2021, Nell issued 600,000 in non-interest-bearing bonds that mature on January 1, 2041. The bonds pay no interest during the period of time they are outstanding interest rate for borrowing with a similar risk and maturity is 12% and the bonds are priced to yield accordingly. What is interest expense in 2022? a. $0 b. 62,202 c. 7,464 d. 8,360
- Sheridan Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2025. Amortized cost Fair value Expected credit loss (a) $50,800 41,600 12.450 Your answer is correct. What is the amount of the credit loss that Sheridan should report on this available-for-sale security at December 31, 2025? (Do not leave any answer field blank. Enter O for amounts.) Amount of the credit loss. $ 9200ony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date cash paid Interest Expense Increase in carrying value carrying value 01/01/2021 $218,690 06/30/2021 $11,500 $13,121 $1,621 220,311 12/31/2021 11,500 13,219 1,719 222,030 06/30/2022 11,500 13,322 1,822 223,852 12/31/2022 11,500 13,431 1,931 225,783 06/30/2023 11,500 13,547 2,047 227,830 12/31/2023 11,500 13,670 2,170 230,000 THA issued the bonds for: Multiple Choice $230,000. $218,690. $299,000. Cannot be determined from the given information.Tony Hawk's Adventure (THA) issued callable bonds on January 1, 2021. THA's accountant has projected the following amortization schedule from issuance until maturity: Date Cash Paid InterestExpense Increase inCarrying Value Carrying value 01/01/2021 $341,728 06/30/2021 $14,400 $17,086 $2,686 344,414 12/31/2021 14,400 17,221 2,821 347,235 06/30/2022 14,400 17,362 2,962 350,197 12/31/2022 14,400 17,510 3,110 353,307 06/30/2023 14,400 17,665 3,265 356,572 12/31/2023 14,400 17,828 3,428 360,000 THA buys back the bonds for $345,005 immediately after the interest payment on 12/31/2021 and retires them. What gain or loss, if any, would THA record on this date? Multiple Choice $3,277 loss. $2,230 gain. $14,995 gain. No gain or loss.