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CHAPTER 13 Current Liabilities, Provisions, and Contingencies Brief Exercises Brief Exercises BE13.1 (L01) Roley SA uses a periodic inventory system and the gross method of
CHAPTER 13 Current Liabilities, Provisions, and Contingencies Brief Exercises Brief Exercises BE13.1 (L01) Roley SA uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased 60,000 of inventory, terms 2/10, n/30, FOB shipping point. Roley paid freight costs of 1,200. On July 3, Roley returned damaged goods and received credit of 6,000. On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley. BE13.2 (L01) Upland Company borrowed $40,000 on November 1, 2018, by signing a $40,000, 9%, 3-month note. Prepare Upland's November 1, 2018, entry; the December 31, 2018, annual adjusting entry; and the February 1, 2019, entry. BE13.3 (L01) Takemoto Ltd. borrowed 60,000,000 on November 1, 2018, by signing a 61,350,000 3-month, zero-interest-bearing note. Prepare Takemoto's November 1, 2018, entry; the December 31, 2018, annual adjusting entry; and the February 1, 2019, entry. BE13.4 (L01) At December 31, 2018, Burr AG owes 500,000 on a note payable due February 15, 2019. (a) If Burr intends to refinance the obligation by issuing a long-term note on February 14 and using the proceeds to pay off the note due February 15, how much (if any) of the 500,000 should be reported as a current liability at December 31, 2018? (b) If Burr pays off the note on February 15, 2019, and then borrows 1,000,000 on a long-term basis on March 1, how much (if any) of the 500,000 should be reported as a current liability at December 31, 2018, the end of the fiscal year
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