Horngren's Accounting (11th Edition)
11th Edition
ISBN: 9780133856781
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 14, Problem 14.1EI
Ethical Issue 14-1
Raffle's Kids, a nonprofit organization that provides aid to victims of domestic violence, low-income families, and special-needs children, has a 30-year, 5% mortgage on the existing building The mortgage requires monthly payments of $3,000. Raffie's bookkeeper is preparing financial statements for the board and, in doing so, lists the mortgage balance of $287,000 under current liabilities because the board hopes to be able to pay the mortgage off in full next year. Of the mortgage principal, $20,000 will be paid next year if Raffie's pays according to the mortgage agreement. The board members call you, their trusted CPA, to advise them on how Raffie's Kids should report the mortgage on its
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Bonnie's Family is a non-profit organization which assists families with low-income,
special needs children, or are victims of domestic violence. They have a 30 year mortgage
with a 5% interest rate which requires a payment of $3,000 per month. In preparing the
financial statements for the board, you list the mortgage balance of $287,000 as a current
liability based on the board hoping to pay it off within the next year. If Bonnie's pays
according to the mortgage agreement, only $20,000 will be paid in the next year. The
board asks an independent CPA to advise how to report the mortgage on the balance
sheet.
1. Explain how to account for the mortgage payment based on U.S. GAAP, assuming
the board feels they will pay the entire balance in the next year.
2. Provide supporting information to the accounting for the mortgage on the balance
sheet for your response to requirement 1.
Problem 16:
The following disbursements were made in relation to the construction of CAN'T BE WITH YOU TONIGHT Co.
building which started January 1, 2020 and the building was completed August 31, 2021. CAN'T BE WITH YOu
TONIGHT Company have the following loans outstanding during 2020 and 2021:
Interest Rate
Amount
Specific loan
15%
2,000,000
General loan
12%
15,000,000
The following expenditures were paid during 2020 and 2021 to KASI NANDITO ASAWA KO Construction.
January
1, 2020
2,000,000
July
1, 2020
5,000,000
November 1, 2020
3,000,000
July
1, 2021
1,000,000
August
31, 2021
2,000,000
13,000,000
Answer the following questions In accordance with PAS 16 and PAS 23.
46. How much is the balance of the Building-in-progress at December 31, 2020?
47. How much interest incurred was capitalized in 2020?
48. How much interest incurred was recognized in the 2020 profit and loss statement?
49. How much interest incurred was recognized in the 2021 profit and loss statement assuming the all…
H-6
Chapter 14 Solutions
Horngren's Accounting (11th Edition)
Ch. 14 - Prob. 1QCCh. 14 - Daniels's bonds payable carry a stated interest...Ch. 14 - Prob. 3QCCh. 14 - Prob. 4QCCh. 14 - Prob. 5QCCh. 14 - Prob. 6QCCh. 14 - Prob. 7QCCh. 14 - Prob. 8QCCh. 14 - Prob. 9AQCCh. 14 - 10B Hicks Corporation issued S500.000 of 5%,...
Ch. 14 - Prob. 1RQCh. 14 - Prob. 2RQCh. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 5RQCh. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Prob. 9RQCh. 14 - Prob. 10RQCh. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - 13. What type of account is Premium on Bonds...Ch. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Prob. 16RQCh. 14 - What does the debt to equity ratio show, and how...Ch. 14 - Prob. 18ARQCh. 14 - Prob. 19ARQCh. 14 - Prob. 20ARQCh. 14 - Prob. 21BRQCh. 14 - Prob. S14.1SECh. 14 - Prob. S14.2SECh. 14 - Prob. S14.3SECh. 14 - Pricing bonds Bond prices depend on the market...Ch. 14 - Determining bond amounts Quick Drive-Ins borrowed...Ch. 14 - Journalizing bond transactions Piper Company...Ch. 14 - Journalizing bond transactions Ogden issued a...Ch. 14 - Journalizing bond transactions Watson Mutual...Ch. 14 - Journalizing bond transactions including...Ch. 14 - Retiring bonds payable before maturity On January...Ch. 14 - Preparing the liabilities section of the balance...Ch. 14 - Prob. S14.12SECh. 14 - Prob. S14A.13SECh. 14 - Determining the present value of bond at issuance...Ch. 14 - Using the effective-interest amortization method...Ch. 14 - Prob. S14B.16SECh. 14 - Accounting for long-term notes payable...Ch. 14 - Preparing an amortization schedule and recording...Ch. 14 - Analyzing alternative plans to raise money AF...Ch. 14 - Determining bond prices and interest expense Nooks...Ch. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Prob. E14.23ECh. 14 - Journalizing bond issuance and interest payments...Ch. 14 - Retiring bonds payable before maturity Parkview...Ch. 14 - Prob. E14.26ECh. 14 - Prob. E14.27ECh. 14 - Prob. E14.28ECh. 14 - Prob. E14.29ECh. 14 - Prob. E14A.30ECh. 14 - A Journalizing liability transactions and...Ch. 14 - Analyzing, journalizing, and reporting bond...Ch. 14 - Analyzing and journalizing bond transactions On...Ch. 14 - Analyzing and journalizing bond transactions On...Ch. 14 - Prob. P14.35APGACh. 14 - Determining the present value of bonds payable and...Ch. 14 - Determining the present value of bands payable and...Ch. 14 - Journalizing liability transactions and reporting...Ch. 14 - Prob. P14.39BPGBCh. 14 - Prob. P14.40BPGBCh. 14 - Prob. P14.41BPGBCh. 14 - Prob. P14.42BPGBCh. 14 - Prob. P14.43BPGBCh. 14 - Prob. P14AB.44BPGBCh. 14 - Describing bonds and journalizing transactions for...Ch. 14 - Decision Case 14-1 The following questions are not...Ch. 14 - Ethical Issue 14-1 Raffle's Kids, a nonprofit...Ch. 14 - Prob. 14.1FCCh. 14 - Prob. 14.1FSC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- -14. Rural County is an agricultural community located hundreds of miles from any metropolitan center. The County established a Television Reception Improvement Fund to serve the public interest by constructing and operat- ing television translator stations. TV translator stations serve communities that cannot receive the signals of free over-the-air TV stations because they are too far away from a broadcasting TV station. Because of the large distances between customers, commercial cable TV providers are also not inclined to serve rural communities. The fund charges TV owners a monthly fee of $15. The fund was established on December 20, 2016, with a transfer of cash from the General Fund of $125,000. On December 31, 2016, the fund acquired land for its translator stations in the amount of $40,000. The remaining cash and the land are the only resources held by the fund at the beginning of 2017. 1. Other than beginning account balances, no entries have been made in the general ledger.…arrow_forward3arrow_forwardCornerstone Exercise 8-32 (Algorithmic) Warranties In 2019, Waldo Balloons sold 100 hot air balloons at $3,400 each. The balloons carry a 5-year warranty for defects. Waldo estimates that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $42,000. Claims of $11,000 were actually incurred during the year to honor their warranties. Required: What was the balance in the warranty liability account at the end of the year?arrow_forward
- Help meeeeeearrow_forwardSaved Help Sa Required information (The following information applies to the questions displayed below.) On January 1, 2021, Gundy Enterprises purchases an office building for $206,000, paying $46,000 down and borrowing the remaining $160,000, signing a 9%, 10-year mortgage. Installment payments of $2,026.81 are due at the end of each month, with the first payment due on January 31, 2021. Required: 1. Record the purchase of the building on January 1, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the purchase of the building. Noxtarrow_forwardProblem 24-03 a Splish Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Splish and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,980 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $6,060 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Splish’s cash flow problems are due primarily to the company’s desire to finance a $298,500 plant expansion over the next 2 fiscal years through internally generated funds.The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years. Splish CorporationBalance SheetMarch 31 Assets 2021 2020 Cash…arrow_forward
- Accounting for liabilities of a known amount This problem continues the Canyon Canoe Company situation from Chapter 10. Amber and Zack Wilson are continuing their analysis of the company’s position and believe the company will need to borrow $15,000 in order to expand operations. They consult Rivers Nation Bank and secure a 6%, one-year note on September 1, 2019, with interest due at maturity. Additionally; the company hires an employee, john Vance, on September 1. John will receive a salary of $3,000 per month. Payroll deductions include federal income tax at 25%, OASDI at 6.2%, Medicare at 1.45%, and monthly health insurance premium of $250. The company will incur matching FICA taxes, FUTA tax at 0.6%, and SUTA tax at 5.4%. Round calculations to two decimals. Omit explanations on journal entries Requirements Record the issuance of the $15,000 note payable on September 1, 2019. Record the employee payroll and employer payroll tax entries on September 30, 2019. Record all payments…arrow_forwardNeed help on three and four with full workarrow_forwardQuestion 5 options: A local Non for Profit had the following activity in October 2022: Cash Donations $200,000 Unrestricted Pledges made during monthly phone a thon to solicit donations $15,000 Expected uncollectible pledges from monthly phone a thon to solicit donations $3,000 What is the correct amount of Contribution Revenue the non for profit should recognize in October 2022? (do not use $ signs, commas or decimals in your answer)arrow_forward
- Need help with Case C & D and Chart thanks.arrow_forwardAnswer in typingarrow_forwardProblem 4:03 (Algorithmic) The employee credit union at State University is planning the allocation of funds for the coming year. The credit union makes four types of loans to its members. In addition, the credit union invests in risk-free securities to stabilize income. The various revenueproducing investments together with annual rates of return are as follows: Type of Loan/Investment Annual Rate of Return (%) Automobile loans 8 Furniture loans Other secured loans Signature loans Risk-free securities The credit union will have $1.4 million available for investment during the coming year. State laws and credit union policies impose the following restrictions on the composition of the loans and investments. . 10 11 . Risk-free securities may not exceed 30% of the total funds available for investment. Signature loans may not exceed 10% of the funds invested in all loans (automobile, furniture, other secured, and signature loans). • Furniture loans plus other secured loans may not exc…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...AccountingISBN:9781305666160Author:James A. Heintz, Robert W. ParryPublisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
How To Make Money With Debt (2022); Author: Proactive Thinker;https://www.youtube.com/watch?v=pXZQBKZCWfc;License: Standard Youtube License