Chapter 13 by mattdominik

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									                Student Name:
                        Class:
                                 Problem 13-01

                  BLANTON PLASTICS
                    General Journal

          Account                       Debit     Credit
Blanton Plastics
Cash
 Notes payable
N,C&I Bank
Notes receivable
 Cash

          Adjusting Entries (December 31, 2006)
Blanton Plastics
Interest expense
  Interest payable
N,C&I Bank
Interest receivable
  Interest revenue

                Maturity (January 31, 2007)
Blanton Plastics
Interest expense
Interest payable
Notes payable
  Cash
N,C&I Bank
Cash
  Interest revenue
  Interest receivable
  Notes receivable

          Issuance of Note (October 1, 2006)
Cash
Discount on notes payable
 Notes payable

           Adjusting Entry (December 31, 2006)
Interest expense
  Interest payable

               Maturity (January 31, 2007)
Interest expense
  Discount on notes payable

Notes payable
 Cash

Effective interest rate:
 Discount
 Cash proceeds
 Interest rate for 4 months
 Annual effective rate
Given Data P13-01:

             BLANTON PLASTICS

Cash borrowed, 10/1/2006   $14,000,000
Term of promissory note              4 months
Promissory note interest           12%
                                          Student Name:
                                                  Class:
                                                           Problem 13-02

                             CAMDEN BIOTECHNOLOGY
                                 General Journal

Date                         Account                              Debit    Credit
       2006
(a)


(b)


(c)


(d)



(e)


       2007
(f)




(g)



                             CAMDEN BIOTECHNOLOGY
                                Partial Balance Sheet
                                 December 31, 2006

Current Liabilities:
 Accounts payable
 Current portion of bank loan
 Liability - refundable deposits
 Sales taxes payable
 Accrued interest payable
Total current liabilities

Long-Term Liabilities:
 Bank loan to be refinanced on a long-term basis
Given Data P13-02:

            CAMDEN BIOTECHNOLOGY

2006
Short-term line of credit                 $15,000,000
Short-term line of credit interest rate         10.5%
Cash borrowed                             $12,000,000
Cash borrowed interest rate                       10%
Deposits received                              $2,600
September - December sales                 $4,100,000
State sales tax                                    3%
Local sales tax                                    3%
2007
Issued 10-yr. bonds at face value         $10,000,000

Trade accounts payable, 12/31/2006          $252,000
                                             Student Name:
                                                     Class:
                                                              Problem 13-04

Requirement 1:
                               MANUFACTURING EQUITABLE
                                    General Journal

Date                            Account                           Debit       Credit
(a)


(b)




(c)


(d)


Requirement 2:
                            MANUFACTURING EQUITABLE
                                Partial Balance Sheet
                                 December 31, 2006

Current Liabilities
 Accounts payable
 Current portion of long-term debt
 Accrued interest payable
 Advances from customers
 Unearned rent revenue
 Bank notes payable
Total current liabilities

Long-Term Liabilities
 Mortgage note payable
Given Data P13-04:

        MANUFACTURING EQUITABLE

Account balances:
Accounts receivable                     $92,500
Accounts payable                         35,000
Bank notes payable                      600,000
Mortgage note payable                 1,200,000

Other information:

Bank notes interest rate                   10%
Mortgage note interest rate                 9%
Cash toward principal                 $250,000
Amount refinanced                     $950,000
Subsidiary accounts credit balances    $18,000
Tenant rent per year                   $30,000
                         Student Name:
                                 Class:
                                          Problem 13-08

Requirement 1:

                   Contingent liability calculation

                 Loss Amount               Probability        Contingency




                                                                             *


     * Present value of $1, n = 1, i = 5$ (from Table 6A-2)

                     HEINRICH TIRE COMPANY
                          General Journal

Date               Account                          Debit           Credit
Requirement 2:



Requirement 3:



Requirement 4:
Given Data P13-08:

           HEINRICH TIRE COMPANY

Tire recall potential loss probability:

      Loss Amount                 Probability
      $40,000,000                    20%
      $30,000,000                    50%
      $20,000,000                    30%


Required settlement date                  12/31/2007
Risk free interest rate                          5%

								
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