Question: Akerman Techonology Corporation is preparing its SFP at 31 December

Akerman Techonology Corporation is preparing its SFP at 31 December 20X5. The following items are under consideration:
a. Rent received in advance for the first quarter of 20X6, $ 16,000.
b. Note payable, long term, $ 80,000. This note was issued on 1 July 20X5 and will be paid in eight equal instalments. The first instalment, $ 10,000, will be paid 1 January 20X6. Interest will accrue at the rate of 6% per annum.
c. $ 200,000 bonds payable bearing interest of 8% per annum, maturing 31 December 20X9. Unamortized premium amounted to $ 5,000 at the end of 20X5.
d. Long- term note payable, $ 500,000, issued on 30 June 20X2 and maturing 30 June 20X6. Interest at 8% must be paid 30 June each year.
e. Restriction for bond sinking fund, $ 40,000; this restriction is required by provisions of the bond agreement.
f. On 28 January 20X6, prior to finalizing the 20X5 statements, the company issued new preferred shares to a private equity fund for $ 1,400,000. The new shares increased the equity base of the company by almost 40%. The fund will be used to retire existing long-term debt and for new production processes. Required: Show, with appropriate captions, how each of these items should be reported on the 31 December 20X5 SFP. If amounts are not quantifiable, describe the appropriate reporting that would be followed when numbers are available. Round amounts to the nearest $ 100.

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  • CreatedFebruary 17, 2015
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