Wolszczak Lid has issued convertible notes under an agreement to maintain net assets, defined in the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wolszczak Lid has issued convertible notes under an agreement to maintain net assets, defined in the agreement as assets mimas all liabilities except the comvertible notes, at an amount not less than 2 times the amount of the comvertible notes isaed Also under the agreement, working capital is to be maintained at not less than 100% of the convertible notes issued. Certain financial information for Wolszczak Lid is prosented b below: WOLSZCZAK LTD Adjusted Trial Balance As at 30 June 2012 Debits Crodits Cash at bank Marketable securities Accounts receivable Allowance for doubtful debts SI00.000 750.000 740.000 $30,000 Inventories so0.000 60,000 Prepaid expenses Land Buildings Accumulated depreciation - buildings Equipment Accumulated depreciation - equipment Accounts payable Loan payable (due 30 June 2013) Accrued expenses payable Convertible notes 180.000 1560000 210,000 L40.000 420,000 690,000 750,000 60,000 2000,000 1,200,000 Share capital - ondinary Retained eamings 670,000 $6.030.000 S6,030,000 Additional information 1. Wolszczak Lad had recorded as at 30 June 2012, S160,000 of collections from its customers that were not received until 2 July 2012 on the basis that such collections were probably in the mail hefore midnight on 30 June 2012 In the afternoon of 2 July 2012, Wolczak Lad issued cheques to its creditors, dating and recording the cheques as at 30 June 2012. The cheques amounted to S160,000, which is equal to the collections in transit 2. 3. Wolszczak Ltd is considering a 1-day extension on the due date of the loan payable to I July 2013. Required a) Contrast, by means of comparative ration, the reported conditions with those that you believe more appropriately represent the financial position of the company. Limit your comparison to the convertible note holdens" agreement. (15 marks) b) Has the company met the conditions of the agreement Explain. (15 marks) Wolszczak Lid has issued convertible notes under an agreement to maintain net assets, defined in the agreement as assets mimas all liabilities except the comvertible notes, at an amount not less than 2 times the amount of the comvertible notes isaed Also under the agreement, working capital is to be maintained at not less than 100% of the convertible notes issued. Certain financial information for Wolszczak Lid is prosented b below: WOLSZCZAK LTD Adjusted Trial Balance As at 30 June 2012 Debits Crodits Cash at bank Marketable securities Accounts receivable Allowance for doubtful debts SI00.000 750.000 740.000 $30,000 Inventories so0.000 60,000 Prepaid expenses Land Buildings Accumulated depreciation - buildings Equipment Accumulated depreciation - equipment Accounts payable Loan payable (due 30 June 2013) Accrued expenses payable Convertible notes 180.000 1560000 210,000 L40.000 420,000 690,000 750,000 60,000 2000,000 1,200,000 Share capital - ondinary Retained eamings 670,000 $6.030.000 S6,030,000 Additional information 1. Wolszczak Lad had recorded as at 30 June 2012, S160,000 of collections from its customers that were not received until 2 July 2012 on the basis that such collections were probably in the mail hefore midnight on 30 June 2012 In the afternoon of 2 July 2012, Wolczak Lad issued cheques to its creditors, dating and recording the cheques as at 30 June 2012. The cheques amounted to S160,000, which is equal to the collections in transit 2. 3. Wolszczak Ltd is considering a 1-day extension on the due date of the loan payable to I July 2013. Required a) Contrast, by means of comparative ration, the reported conditions with those that you believe more appropriately represent the financial position of the company. Limit your comparison to the convertible note holdens" agreement. (15 marks) b) Has the company met the conditions of the agreement Explain. (15 marks)
Expert Answer:
Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
Posted Date:
Students also viewed these accounting questions
-
Wolszczak Lad has issued convertible notes under an agreement to maintain net assets, defined in the agreement as assets minus all liabilities except the convertible notes, at an amount not less than...
-
Simpson Ltd issued $10 million of convertible notes on 1 July 2023. The notes have a life of 3 years and a face value of $10 each. Annual interest of 4% is payable at the end of each year. The notes...
-
An investment company recently issued convertible bonds with a $1,000 par value. The bonds have a conversion price of $25 a share. At the time of issue, the company's underlying stock price is $20....
-
After pollen lands on a stigma, it is far away from the ovule with the megagametophyte, which holds the egg (the megagamete). How are the two sperm cells transported from the stigma to the egg?
-
Assume that college statistics students have normally distributed heights with a mean of 68.0 in. and a standard deviation of 4.36 in. (based on Data Set 8 in Appendix B). If 45 students are randomly...
-
Explain how advanced computational methods, such as Monte Carlo simulation and Bayesian networks, can be applied to improve hazard analysis accuracy and reduce uncertainty in risk assessment .
-
Incomplete information concerning the financial performance of two manufacturing companies is presented below. Required Determine the answers to (a) to(f) for the two companies. Work in process,...
-
Riviera Manufacturing, Inc., has the following flexible budget formulas and amounts: Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$25 per...
-
Assume that on January 1, year 1, ABC Incorporated issued 7,650 stock options with an estimated value of $18 per option. Each option entitles the owner to purchase one share of ABC stock for $27 a...
-
Reconsider Prob. 253. Assuming a linear pressure increase during the compression, estimate the energy needed to compress the water isothermally. Data from Problem 53. A frictionless piston-cylinder...
-
choose the right answer : 1 1 NF , 2 , 2 NF , 3 , 3 NF , , and 4 4 NF are example of various level of normalization ( ( NF = = Normal Form ) . ) . Other examples of various levels of normalization...
-
What are the similarities between the Panic of 1907, the S&L crisis, and the crisis of 2008?
-
Why is there no long-run trade-off between unemployment and inflation?
-
In applying the arbitrary and capricious standard, what do courts typically consider?
-
What are the limits of macroeconomic policy activism?
-
When can an agency hold a closed meeting?
-
Question 1 The external loadings imposed on a horizontal beam is shown in Figure Q1(a). The beam is pivoted at Point A. (a) (b) 100 N/m 50 N/m 20 N 40 cm 50 cm Figure Q1 70 cm Apply the principle of...
-
Consider the combustion of methanol below. If 64 grams of methanol reacts with 160 grams of oxygen, what is the CHANGE in volume at STP. 2CH3OH(g) + 3O2(g) 2CO2(g) + 4H2O(1) The volume decreases by...
-
What is the benefit of the 65-day rule?
-
Under Sec. 280A, how are expenses allocated to the rental use of a vacation home? In what order must the expenses be deducted against the gross income of the property?
-
Marc, age 45, sells his personal residence on May 15, 2015, for $180,000. He pays $8,000 in selling expenses and $900 in repair expenses to help sell the residence. He has lived in the residence...
-
What methods can a company use to raise capital?
-
Does higher expected inflation increase, decrease, or have no effect on the required rate of return?
-
You have been asked to consult for an entrepreneur who is assembling investors for a new professional sport league. A critical decision for the league will be whether to organize under a...
Study smarter with the SolutionInn App