Problem 1-7 (IAA) Problem 1-6 (LAA) Problem 1-5 (IAA) Problem 1-3 (IAA) Cavalier Company provided the following information on Intercon Company is planning to refinance certain short-term December 31, 2020: obligations on a long term basis. The 2020 financial statements On December 31, 2020, Cordillera Company reported the Manchester Company provided the following information on are issued on March 15, 2021. following liabilities: December 31, 2020: Accounts payable 6,500,000 8,000.000 On December 31, 2020, before reclassification of short-term debt, Note payable - 9% 3,000,000 wes withheld from employees 900,000 Notes payable - bank Interest payable 150,000 the liabilities are: Note payable - 6,000.000 Cash balance at First State Bank 2,500,040 Mortgage note payable - 10% 2,000,000 Note payable - 10% 4,000,000 Cash overdraft at Harbor Bank 1,300,000 4,000,000 Accounts payable 7.000,000 Note payable - 11% 5,000.000 Accounts receivable with credit balance 750,000 Bonds payable Note payable - bank 12,000,000 timated expenses of meeting warranties on merchandise previously sold 500,000 Bank notes payable include two separate notes payable to Accrued expenses 4,000,000 The 9% note payable is noncancelable and matures on July Mortgage Estimated damages as a result of unsatisfactory 4,000,000 31, 2021. Sufficient cash is expected to be available to retire e on a contract 1,500,000 First Bank. Note payable - due in 2022 3,000,000 the note at maturity. Accounts payable 3,000,000 Deferred serial bonds, issued at par and bearing A P3,000,000, 10% note issued March 1, 2019, payable on The entity intends to refinance P9,000,000 of the P12,000,000 The 8% note payable matures on May 31, 2026 but the creditor interest at 12%, payable in semiannual installment demand. Interest is payable every six months. bank note payable on a long term basis. has the option of calling the note or demanding payment on of P500,000 due April 1 and October 1 of each year, June 30, 2021. the last bond to be paid on October 1, 2026. 5,000,000 A one-year, P5,000,000, 11% note issued January 2, 2020. Interest is also paid semiannually. On December 31, 2020, the entity negotiated a written Although the entire P12,000,000 is due on June 30, 2021, the Stock dividend payable 2,000,000 bank has informally agreed to extend the maturity date for However, the call option is not expected to be exercised given agreement with First Bank to replace the note with a the prevailing market condition. Required: 2-year, P5,000,000, 10%% note to be issued January 2, 2021. P6,000,000 to June 30, 2022, if necessary. On January 31, 2021, the entity issued share capital for The 10% note payable is due on March 31, 2022. A debt Compute the total current liabilities on December 31, 2020. The 10% mortgage note was issued October 1, 2019 with a P4,000,000, net of issue costs and underwriting fees of P500,000. covenant requires Cordillera Company to maintain current term of 10 years. assets at least equal to 150% of current liabilities. Problem 1-4 (AICPA Adapted) Terms of the note give the holder the right to demand On February 15, 2021, the entity entered into a financing On December 31, 2020, Cordillera Company is in violation Multiple Company provided the following information on agreement with a financially capable commercial bank, immediate payment if the entity fails to make a monthly of this covenant. December 31, 2020: permitting the entity to borrow up to P3,000,000. interest payment within 10 days of the date the payment is However, Cordillera Company obtained a waiver from the Accounts payable after deducting debit balances in due Borrowings available at the entity's option on April 1, 2021 will creditor until June 2021 having convinced the creditor that suppliers' accounts of P100,000 500,000 Accrued liabilities mature five years after the loan date. Cordillera's normal 2 to 1 ratio of current assets to current 50,000 On December 31, 2020, the entity is three months behind in Note payable - due March 31, 2021 liabilities will be reestablished during the first half of 2021. Note payable - due May 1, 2021 1,000,000 paying the required interest payment. 800,000 The entity used the entire proceeds of the issue of share capital Bonds payable - due December 31, 2022 The 11% note payable matures on, June 30, 2021, On January 2,000,000 to retire part of the current note payable and now intended to 31 2021 before the issuance of the 2020 financial statements, The bonds payable are 10-year, 8% bonds, issued dune ou draw down the entire available commitment of the five-year the note payabe was refinanced on a long-term data On March 1, 2021 before the 2020 financial statements were 2011. Interest is payable semiannually on June 30 and debt on April 1, 2021. issued, the note payable of P1,000,000 was replaced by an December 31. 18-month note for the same amount. Required: Required: The entity is considering similar action on the P800,000 note Required: Explain the appropriate classification of the notes payable due on May 1, 2021. The financial statements were issued on March 31, 2021. Compute the total current liabilities on December 31, 2020. 1. Present the liabilities on December 31, 2020. as current or noncurrent in the statement of financial 2. Describe any financial statement disclosure position on December 31, 2020. Required: Problem 1-1 (IAA) Problem 1-2 (LAA) Compute total current liabilities. Compute total noncurrent liabilities. On December 31, 2020, Glare Company provided the following Easy Company provided the following information on information: December 31, 2020: Accounts payable, including deposits and advances Notes payable: Trade 3,000,000 from customer of P250,000 1,250,000 Bank loans 2,000,000 Notes payable, including note payable to bank due on Advances from officers 500,000 December 31, 2022 of P500,000 Accounts payable - trade 4,000,000 1,500,000 Bank overdraft 300,000 Share dividend payable 400,000 Dividends payable 1,000,000 Credit balances in customers' accounts 200,000 Withholding tax payable 100,000 Serial bonds payable in semiannual installment Mortgage payable 3,800,000 Income tax payable 800,000 of P500,000 5,000,000 Estimated warranty liability 600,000 Accrued interest on bonds payable Estimated damages payable by reason of breach of contract 700,000 150,000 Contested BIR tax assessment - possible obligation 300,000 Accrued liabilities 900,000 Estimated premium liability 200,000 Unearned rent income 100,000 Claim for increase in wages by employees covered in a pending lawsuit 3,500,000 Required: Contract entered into for the construction of building 5,000,000 Required: Compute the total current liabilities on December 31, 2020. Compute the total current liabilities on December 31, 2020