Question

Purpose: To help familiarize you with the financial reporting of a real company to further your understanding of the chapter material you are learning.
This case will help you to better understand the effect of adjusting journal entries on the financial statements. We do not have access to the journals and ledgers used by Bombardier Inc., but we can see some of the adjusted accounts on the company’s financial statements. Refer to the Bombardier Inc. income statements, “Consolidated Statements of Income,” and the Bombardier Inc. balance sheets in MyAccountingLab. Also, Note 7 titled "Property, Plant and Equipment” on page 184 of the Bombardier Annual Report uses the term amortization instead of depreciation. You can consider these two terms to mean the same thing at this point.
Requirements
1. Open T-accounts for the following accounts and their balances as of January 31, 2011 prior to closing.
PP&E ......................... $1,930.25
Accounts Payable and Accrued Liabilities ........... $7,835
Advances and progress billings in excess
of related long-term contract costs.............................................................. $1,638
Long-Term Debt .................... $6,210
2. Using the following information for Bombardier Inc.’s 2011 operations, make the appropriate year-end journal entries.
a. Payment of Accrued Liabilities of $1,021.
b. Amortization expense, $13.75.
c. Accrue Accounts Payable and Accrued Liabilities, $1,213.
d. Additional Advances and progress billings in excess of related long-term contract costs, $783.
e. Principal repayments on the Long-Term Debt of $1,575.
3. Post the journal entries to the T-accounts you set up. Check the updated ending balances in each account against the balances reported by iBombardier Inc. as of January 31, 2011. You can determine the total Accumulated Amortization account by taking the difference between Cost and Net Book Value from Note 7.


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  • CreatedJuly 08, 2015
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