Exercise Intermediate.docx

EXERCISE EXERCISE 5-2 1. (c) 11. (c) 2. (a) (3) 12. (e) 3. (e) 13. (b) 4. (e) 14. (c) 5 (a) (2) 15. (a) (2) 6. (b) 16. (a) (1) 7. (e) 17. (b) 8. (a) (3) 18. (b) 9. (b) 19. (d) 10. (b) 20. (e)

EXERCISE 5-4 GULISTAN INC. Statement of Financial Position December 31 Assets Non-current assets Long-term investments Long-term investment in preference shares ......................................... Land held for future plant site....................... Cash restricted for plant expansion............ Total long-term investments ............ Property, plant, and equipment Buildings .............................................................. Less: Accum. depreciation—buildings ...........................

$XXX XXX XXX $XXX

XXX XXX

XXX

Intangible assets Copyrights ...........................................................

XXX

Current assets Inventories Finished goods................................... $XXX Work in process ................................... XXX Raw materials....................................... XXX XXX Accounts receivable........................................ XXX Less: Allowance for doubtful accounts..................... XXX XXX Notes receivable ................................................ XXX Receivables—officers ...................................... XXX Cash ....................................................................... XXX Less: Cash restricted for plant expansion ..................XXX XXX Total current assets ............................ Total assets............................................

XXX $XXX

Equity and Liabilities Equity Share capital—ordinary ..................................... XXX Share premium—ordinary shares ..................... XXX Retained earnings XXX Less: Treasury shares, at cost ......................... (XXX) Total shareholders’ equity ..................... Total equity and liabilities ...................... Non-current liabilities

XXX $XXX

Bonds payable, due in four years...................... $XXX Long-term note payable....................................... XXX Total non-current liabilities....................

$XXX

Current liabilities Notes payable, short-term.................................... XXX Accrued salaries payable .................................... XXX Unearned subscriptions revenue ...................... .XXX Unearned rent revenue......................................... XXX Total current liabilities............................. …XXX Total liabilities ............................................

XXX XXX

EXERCISE 5-7 Current assets Inventories at lower-of-cost (determined using FIFO) or net-realizable-value Finished goods...........................................€ 52,000 Work-in-process........................................... 34,000 Raw materials .............................................. 187,000 Accounts receivable (of which €50,000 is pledged as collateral on a bank loan) ............. 161,000 Less: Allowance for doubtful accounts............ 12,000 Interest receivable [(€40,000 X 6%) X 8/12] ....... Trading securities at fair value (cost, €31,000) ......................................................... Cash ........................................................................ 92,000* Less: Cash restricted for plant expansion....... (50,000) Total current assets.................................

€273,000

149,000 1,600 29,000 42,000 €494,600

EXERCISE 5-8 1. Dividends payable of $1,900,000 will be reported as a current liability [(1,000,000 – 50,000) X $2.00]. 2. Bonds payable of $25,000,000 and interest payable of $2,000,000 ($100,000,000 X 8% X 3/12) will be reported as a current liability. Bonds payable of $75,000,000 will be reported as a non-current liability. 3. Customer advances of $17,000,000 will be reported as a current liability ($12,000,000 + $30,000,000 – $25,000,000).