Consider each of the following separate situations that arose in 20X1: a. Corporation G invested $ 65,000
Question:
Consider each of the following separate situations that arose in 20X1:
a. Corporation G invested $ 65,000 in corporate bonds as a short- term investment. The year- end 20X1 market value of the bonds is $ 68,000.
b. Corporation A has the equivalent of C$ 200,000 cash in a bank in Elbonia. Elbonia’s laws prohibit transferring the cash to the Canadian parent company. Corporation A has ongoing operations in Elbonia.
c. Corporation B received $ 72,000 from a customer as advance payment for special- order goods to be delivered in 20X3.
d. Corporation C has $ 400,000 in notes receivable from customers. The notes mature over a three- year period. The company normally sells its products on an instalment basis that requires payments over three years.
e. Corporation D made an advance payment of $ 330,000 into the employees’ pension plan. The company will recognize the pension expense over five years beginning in 20X2.
f. Corporation H holds 10,000 shares in Theo Limited as a long- term investment; the shares cost $ 14 each. At year- end 20X1, the market value is $ 20 per share.
g. Corporation E has negotiated a two- year $ 600,000 loan from its bank to finance equipment. The bank will charge 6% interest per year, compounded. The loan will be repaid in a single lump sum in 20X3, including interest. The market rate of interest is 6%.
h. Corporation F has a major customer that recently went into receivership. As a result of an agreement among all creditors, Corporation F will receive payment on the customer’s $ 240,000 outstanding account in equal instalments over a four- year period.
Required:
For each item indicate the amount(s) that will show as current and the amount(s) that will show as noncurrent in each company’s 20X1 SFP.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I