9th Edition

ISBN: 9781260216141

Author: SPICELAND

Publisher: MCG CUSTOM

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Textbook Question

Chapter 3, Problem 3.8BYP

Judgment Case 3–8

Post fiscal year-end e vents

• LO3–4

The fiscal year-end for the Northwest Distribution Corporation is December 31. The company’s 2018 financial statements were issued on March 15, 2019. The following events occurred between December 31, 2018, and March 15, 2019.

1. On January 22, 2019, the company negotiated a major merger with Blandon Industries. The merger will be completed by the middle of 2019.

2. On February 3, 2019, Northwest negotiated a $10 million long-term note with the Credit Bank of Ohio. The amount of the note is material.

3. On February 25, 2019, a flood destroyed one of the company’s manufacturing plants causing $600,000 of uninsured damage.

Required:

Determine the appropriate treatment of each of these events in the 2018 financial statements of Northwest Distribution Corporation.

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Chapter 3, Problem 3.7BYP

Chapter 3, Problem 3.9BYP

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KIARA LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Property, plant and equipment (cost) Accumulated depreciation Long-term investments Inventory Accounts receivable Company tax paid in advance Bank EQUITY AND LIABILITIES 2024 2023 R R 2 490 000 1 620 000 (630 000) 660 000 1 050 000 1 230 000 30 000 (480 000) 450 000 1 290 000 900 000 0 750 000 660 000 5 580 000 4 440 000 Ordinary share capital 2 700 000 2 000 000 Retained income 1 500 000 1 158 000 Long-term loan from Kip Bank (15%) 900 000 1 000 000 Accounts payable 480 000 228 000 Company tax payable 0 54 000 5 580 000 4 440 000 ADDITIONAL INFORMATION All purchases and sales are on credit. Interim dividends paid during the year amounted to R150 750. Credit terms of 3/10 net 60 days are granted by creditors.

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Chapter 3 Solutions

INTERMEDIATE ACCOUNTING(LL)-W/CONNECT

Ch. 3 - Prob. 3.1Q Ch. 3 - Prob. 3.2Q Ch. 3 - Define current assets and list the typical asset...Ch. 3 - Prob. 3.4Q Ch. 3 - Prob. 3.5Q Ch. 3 - Prob. 3.6Q Ch. 3 - Describe the common characteristics of assets...Ch. 3 - Prob. 3.8Q Ch. 3 - Prob. 3.9Q Ch. 3 - Define the terms paid-in-capital and retained...

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Solution Summary: The author explains that financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making.

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