Solutions for Intermediate Accounting, Volume 2, 5th Edition by Kin Lo
40 keer bekeken 2 keer verkocht
Vak
Intermediate Accounting
Instelling
Intermediate Accounting
Complete Solutions Manual for Intermediate Accounting, Volume 2, 5th Canadian Edition by Kin Lo, George Fisher. ISBN-13: 4919
Full Chapters Solutions are included for Vol 2 5ce Kin Lo
Current Liabilities and Contingencies
Non-current Financial Liabilities
Equities
Complex Financial Instrum...
Chapter 11
Current Liabilities, Non-Financial Liabilities,
and Contingencies
L. Problems
P11-1. Suggested solution:
Financial or non-financial
Item Liability obligation? Explanation
1. Accounts payable F
2. Warranties payable N Obligation is to deliver
goods or services
3. USD bank loan F
4. Bank overdraft F
5. Sales tax payable N Obligation is not contractual
in nature
6. Notes payable F
7. Unearned revenue N Obligation is to deliver
goods or services
8. Lease liability F
9. HST payable N Obligation is not contractual
in nature
10. Bank loan F
11. Bonds payable F
12. Obligation under customer N Obligation is to deliver
loyalty plan goods or services
13. Income taxes payable N Obligation is not contractual
in nature
P11-2. Suggested solution:
To be classified as a liability, the item must: i) be a present obligation; ii) have arisen from a
past event; and iii) be expected to result in an outflow of economic benefits. This is an “and”
situation as all three criteria must be present before a liability is recorded. The precise amount
of the obligation need not be known, provided that a reliable estimate can be made of the
amount due. Provisions are liabilities in which there is some uncertainty as to the timing or
amount of payment.
,ISM for Lo/Fisher, Intermediate Accounting, Vol. 2, Fifth Edition
Trade accounts payable meet the criteria of a liability as set out below:
* Present obligation: The debtor is presently contractually obliged to pay for goods or services
received.
* Past event: The trade payable arose from a good or service the debtor previously received or
consumed.
* Outflow of economic benefits: Trade payables are typically settled in cash—an outflow of
economic benefits.
P11-3. Suggested solution:
a. Provisions are liabilities in which there is some uncertainty as to the timing or amount of
payment.
b. Financial liabilities are contracts to deliver cash or other financial assets to another party.
They differ from non-financial liabilities as the latter category is typically settled through the
provision of goods or services.
c. A non-exhaustive list of financial liabilities includes accounts payable; bank loans; notes
payable; bonds payable; and lease liabilities. A non-exhaustive list of non-financial
obligations includes warranties payable; unearned revenue; and income taxes payable.
P11-4. Suggested solution:
a. The three broad categories of liabilities are:
1. Financial liabilities held for trading
2. Other financial liabilities
3. Non-financial liabilities
b.
* Held-for-trading liabilities are initially recognized at fair value.
* Other financial liabilities are initially reported at fair value minus the transaction costs
directly resulting from incurring the obligation.
* The initial measurement of non-financial liabilities depends on their nature. For instance,
warranties are recorded at management’s best estimate of the downstream cost of meeting
the entity’s contractual obligations, while prepaid magazine subscription revenue is
valued at the consideration initially received.
c.
* Held-for-trading liabilities are subsequently recognized at fair value.
* Other financial liabilities are subsequently measured at amortized cost using the effective
rate method.
* Non-financial liabilities are subsequently measured at the initial obligation less the
amount earned to date or satisfied to date through performance. For example, a publisher
that received $750 in advance for a three-year subscription and has delivered the
magazine for one year would report an obligation of $500 ($750 – $250).
, Chapter 11: Current Liabilities, Non-Financial Liabilities, and Contingencies
P11-5. Suggested solution:
Item Liability Current or Explanation
non-
current
liability, or
potentially
both?
1. Accounts payable C
2. Warranties payable B The obligation that is expected to be
settled within one year of the balance
sheet date is current, the balance non-
current
3. Deposits B The classification of the deposit as
current or non-current depends upon the
expected settlement date. If less than one
year after the balance sheet date, the
obligation is classified as current
4. Bank overdraft C
5. Sales tax payable C
6. Bank loan maturing in five N The obligation is reported as a non-
years was in default during the current liability because the grace period
year; before year-end, the was granted before the balance sheet date
lender grants a grace period and extends twelve months after year-
that extends 12 months after end
the balance sheet date
7. Five-year term loan, amortized B The principal portion of the payments
payments are payable annually due within one year of the balance sheet
date are classified as current, the balance
as non-current
8. Unearned revenue B The classification of the obligation as
current or non-current depends upon
when revenue is the expected to be
recognized. If less than one year after the
balance sheet date, the obligation is
classified as current
9. Lease liability B The principal portion of the payments
due within one year of the balance sheet
date are classified as current, the balance
as non-current
10. HST payable C
11. 90-day bank loan C
12. Bond payable that matures in N The obligation is reported as non-current
two years as the maturity date is two years after the
balance sheet date
, ISM for Lo/Fisher, Intermediate Accounting, Vol. 2, Fifth Edition
13. Obligation under customer C Classified as current as the entity does
loyalty plan not have the right at the end of the
reporting period to defer settlement of
the liability for at least twelve months
after the reporting period.
14. Income taxes payable C
15. Bank loan that matures in five C
years that is currently in
default
16. Three-year bank loan that C
matures six months after the
balance sheet date
P11-6. Suggested solution:
a. Gross method – discount taken
Jan. 6 Dr. Inventory 300,000
Cr. Accounts payable 300,000
Jan. 12 Dr. Inventory 2,000
Cr. Accounts payable 2,000
Voordelen van het kopen van samenvattingen bij Stuvia op een rij:
Verzekerd van kwaliteit door reviews
Stuvia-klanten hebben meer dan 700.000 samenvattingen beoordeeld. Zo weet je zeker dat je de beste documenten koopt!
Snel en makkelijk kopen
Je betaalt supersnel en eenmalig met iDeal, creditcard of Stuvia-tegoed voor de samenvatting. Zonder lidmaatschap.
Focus op de essentie
Samenvattingen worden geschreven voor en door anderen. Daarom zijn de samenvattingen altijd betrouwbaar en actueel. Zo kom je snel tot de kern!
Veelgestelde vragen
Wat krijg ik als ik dit document koop?
Je krijgt een PDF, die direct beschikbaar is na je aankoop. Het gekochte document is altijd, overal en oneindig toegankelijk via je profiel.
Tevredenheidsgarantie: hoe werkt dat?
Onze tevredenheidsgarantie zorgt ervoor dat je altijd een studiedocument vindt dat goed bij je past. Je vult een formulier in en onze klantenservice regelt de rest.
Van wie koop ik deze samenvatting?
Stuvia is een marktplaats, je koop dit document dus niet van ons, maar van verkoper StepsSol. Stuvia faciliteert de betaling aan de verkoper.
Zit ik meteen vast aan een abonnement?
Nee, je koopt alleen deze samenvatting voor €29,22. Je zit daarna nergens aan vast.
