ORACION, Johanna Shaine A.

AC4A

ANSWERS
1A 36 A 71 D SOLUTIONS
2C 37 D 72 A 1.)
3D 38 C 73 C The company has no choice but to refinance, and
4B 39 C 74 D issuance occurs after the reporting date.
5C 40 D 75 C
6A 41 C
7B 42 501,428.57
8. A 43 A
9B 44 B 2.)
10 C 45 B Principal 50,000
11 B 46 D Acc. Int(25k x.10x6/12) 12,500
12 C 47 B 62,500
13 C 48 A
14 C 49 B
15 B 50 A
16 B 51 B
17 C 52 B
18 C 53 D 3.)
19 A 54 B PV or Principal(1Mx.3855) 385,500
20 B 55 D PV of Int P.(80k x 6.1446) 491,568
21 B 56 C 877,068
22 B 57 B
23 A 58 C
24 B 59 B
25 C 60 D 4.)
26 B 61 B 1,329,000 x 0.06 79,740
27 B 62 A
28 B 63 A
29 D 64 A
30 B 65 C
31 D 66 D
32 B 67 B 5.)
33 D 68 B 2.4M x 0.80 1,920,000
34 B 69 C 2,000,000 - 1,920,000 80,000
35 D 70 B

6.)
Current Asset 2,156,000
Retirement P.(2M x 1.02) -2,040,000
116,000
7.)
(400,000x.60)/5 x 0.50 24,000
100,000/5 x 0.50 -10,000
14,000

8.)
PV of Prin.(200k x 0.4564) 91,280
PV of Int. Paym.( 6kx13.5903) 81,541.80
172,821.80

9.)
Estimated value 1,160,000
Useful life /5
Amort. Expense 232,000

10.)
120k/10 12,000

May (2021-2022) 12,000

May (2022-2023) 12,000
May (2023-2024) (12kx8/12) 8,000
32,000
 11.)
refinance, and Current Asset 200,000
Face Value -185,000
15,000

12.)
Issuance Price (20,000,000 x 97%) 19,400,000
Accrued Interest (20,000,000 x 9% x 2/12) 300,000
19,700,000

14.)
Continuing and frequent repairs 40,000
Repainting of Plant Building 10,000
Partial Replacement of roof tiles 14,000
64,000

15.)
The amount of interest cost that Cole should capitalize is 40,000 *(Given in the Problem)*

16.)
PV of Prin( 2M X 0.6830) 1,366,000
PV of Int.(160k x 3.1699) 507,184
1,873,184
-2,000,000
126,816

17.)
12/31/20- 2 y/o (20 x 13,000)= 260,000 40,000
12/31/20 -3y/o (20 x 15,000)= 300,000 10,000
40,000 10,000
12/31/20- 0 y/o (5 x 5,000)= 25,000 60,000
12/31/20- 1y/o (5 x 7,000)= 35,000
10,000
12/31/20- 2y/o (5 x 13,000)= 65,000
12/31/20- 3y/o (5 x 15,000)= 75,000
10,000

18.)
5,350,000 + 750,000 6,100,000
1,100,000 + 2,123,000 3,233,000
2,877,000

19.)
Cost of Building and Int (24,000,000 + 1,600,000) 25,600,000
Salvage Value -4,600,000
21,000,000
/3
700,000
21.)
Beg Bal 118,000
Advances received 184,000
Advances credited to revenue after shipment of orders -164,000
Canceled orders -50,000
88,000
22.)
469,500 x 10% 46,950
500,000 x 9% -45,000
1,950
x 1/2
975
46,950
975
470,475

23.)
Cost- 1/1/20 2,200,000
Accumulated Dep.( 2,200/40 x 3) -165,000
Carrying Amount -12/31/22 2,035,000

Sale Price 2,900,000

Carrying Amount -2,035,000
Gain 865,000

24.)
6,000,000-5.9M 100,000
5.8M/40 145,000

25.)
Patent 90,000
90,000/10 x 3 -27,000
63,000

26.)
1,000,000x 6/12 500,000
2,100,000 x 4/12 700,000
1,200,000
27.)
FV of shares 1,000,000
Par Value of shares (100,000 x 8.50) -850,000
Share Premium 150,000

28.)
Issue price of bonds with conversion privilege (4,000,000 x 120%) 4,800,000
Market Value of the bonds w/o conversion privilege (4,000,000 x 113%) 4,520,000
280,000

29.)
Rel. Costs( 450,000/125 x 3) 90,000
-450,000
360,000
-750,000
390,000

30.)
2.64M + 180K +360K - 300K 2,880,000
/ 1.2M
2.4
x 60,000
144,000
31.) 41.)
100,000- 90,000= 10,000 Facilities Purchased
Revaluation Surplu 20,000 (6M- 540K)/20 x 2

32.)
10,500 x 90 945,000
-296,000 42.)
649,000 8-2=6+8= 14 lease term
540k/14
540k-38,671.43=
33.)
5-year Bonds Payable 8% 1,600,000 43.)
Notes Payable (5 yr.) 165,000 100%
Mortgage Payable -200,000 -30%
-15,000 70%
1,950,000

34.) 44.)
Face amount(2,000 x 1,000)= 2,000,000 Fair Value
Cost and Book Value
PV (2,000,000 x 0.68058) 1,361,160 Gain on Sale
PV of ordinary annuity for the interest (120,000 x 3.99271) 473,125
1,840,285

35.) 45.)
600,000 + 60,000 660,000 Price of the machine
530,000-130,000 400,000 Installation
260,000 Cost of machine

36.)
3.5M + 6M + 9M 18,500,000
3M + 5M + 7M 15,000,000
3,500,000

46.)
Any effects of discounts or premiums are eli
37.)
172,800-135,000 = 37,800

240,000-83,000= 157,000
-172,800
15,800

38.) 47.)
1,000,000 x 2.91 2,910,000 3y/o- 11k x 12k
2,000,000 0.5 y/o- 1x 8k
4,190,000

39.)
1.08M/(1.08M + 120K) x 1M 900,000

48.)
Carrying Value, Beg
Fair Value of the bond
Gain

49.)
Cash Paid (5,009 x 5)
Present Value
Interest Rev.

50.)
0
All will expire in 2022.
 6,000,000
540,000
5,460,000
-800,000
4,660,000
/10
466,000

4 lease term
38,571.43
501,428.57

220,000
-192,000
28,000

950,000
30,000
980,000

of discounts or premiums are eliminated from the financial statements when the fair value option is chosen, and the accounting standards f
132,000
8,000
140,000

107,720
-106,460
1260

25,045
-19,485
5,560
he accounting standards for disclosing discounts and premiums are no longer applicable.