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b
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Template 6 Points
Page: 724 BE: 4 5 10 Points
Page: 726 E: 8 10 Points
Page: 733 Prob: 2 23 Points
Template 6 Points
Template Financial Reporting 5 Points
Template FASB CodiIication 5 Points
10 Points
25 Points
BE: 4 Total Debits Credits Check
E: 8 Total Debits Credits Check
Prob: 2 Total Debits Credits Check
No assignments will be accepted aIter being delinquent more than 24 hours.
Book:
Template or Iile sharing is cheating and will result in a zero Ior the assignment.
Late assignments are discounted 30,
Check Numbers:
39,149,900 $
Use the "Chart oI Accounts" Ior your account titles and the "Assignment Templates" Ior your work.
Each student is expected to complete their own template.
100 Points
Financial Reporting:
889,000.00 $
Chapter 13 Assignment Current Liabilities & Contingencies
Connect Activities: LearnSmart Module
Assignment
Case:
CPA Problems:
24,810,000 $
Investment revenue receivable
Investment in HTM securities
Investment in AFS securities
Investment in Trading securities
Premium on bond investments
Discount on bond investments
Fair value adjustment
Investment in aIIiliate shares
Loss - litigation
Interest expense
Cash
Investment revenue
Net unrealized holding gains or losses - IS
Gain on sale oI investments
Warranty expense
WarranLy llablllLy
Accounts receivable
lnLeresL payable
Sales Lax payable
Liability - customer advance
Liability - litigation
Sales revenue
Income summary
Loss on sale oI investments
Liability - reIundable deposits
noLes payable
Net unrealized holding gains or losses - OCI
ulscounL on noLes payable
Bonds payable
Chart oI Accounts
Name: Date:
Case: Ethics & Disclosure
1.
2.
3.
Treatment iI the settlement occurred on April 13:
Journal entry:
Learning rubric: Points will be assigned based on the Iollowing: U A VG
1 0 1 2
2 0 1 2
3 0 1 2
Total value 0 3 6
Unacceptable (U)
- No or almost no component oI the question is addressed.
- No or almost no use oI relevant course material.
- Response is unrelated to question asked.
- Solution is partially correct.
- Response has spelling, grammar or Iormatting errors.
Acceptable (A)
- Some oI the question's components are addressed.
- Some oI the relevant course material is used.
- Response is at time related to question asked.
- Solution is partially correct.
Very Good (VG)
- All major components oI the question is addressed,
- All relevant course material is properly and appropriately applied.
- Response is complete and is related to question asked.
- Solution is correct.
Treatment iI the settlement had occurred aIter April 17
Journal entry
SkillSoIt is a leading provider oI content resources and complementary technologies Ior integrated enterprise learning. The
company`s Iiscal year ends January 31, 2006, and it plans to Iile its Iinancial statements with the SEC on April, 17, 2006.
On April 13, the company issued the Iollowing press release ( in part):
NASHUA, N. H., April 13 / PRNewswire- FirstCall/ SkillSoIt PLC ( Nasdaq: SKIL), . . . has agreed . . . to settle a
lawsuit Iiled against it and certain oI its Iormer and current oIIicers and directors in late 2004 related to the 2002 securities
class action lawsuit. This lawsuit included substantially the same claims as those set Iorth in the previously settled 2002
securities class action lawsuit. Under the terms oI the settlement, SkillSoIt will pay a total oI $ 1.79 million to the plaintiIIs
prior to April 17, 2006.
Required:
Treatment iI the settlement had occurred aIter April 17:
Treatment oI settlement:
From an accounting perspective, how should SkillSoIt have treated the settlement?
Relying on the inIormation provided by the press release, re- create the journal entry SkillSoIt recorded Ior the
settlement.
Suppose the settlement had occurred aIter April 17. How should SkillSoIt have treated the settlement?
Date Account Titles / Explanations Debit Credit
Name: Date:
BE:
BE: 13-4
BE: 13-5
EIIective interest rate (show calc below)
Discount on notes payable
Date Account Titles / Explanations Debit Credit
Notes payable
13-4,5
Chart oI Accounts
Cash Interest expense
Check: - -
Date Account Titles / Explanations Debit Credit
Name: Date:
Ex:
EX: 13-8
Required 1.
Required 2.
Required 3.
13-8
Chart oI Accounts
Cash Sales tax payable
Sales revenue
Date Account Titles / Explanations Debit Credit
Check: - -
Accounts receivable Liability - customer advance
Liability - reIundable deposits
Name: Date:
Prob.
Requirement 1.
a. No entry Ior a line oI credit until cash is actually pulled down.
b.
c.
d.
e.
I.
Interest payable
Notes payable
g.
Requirement 2.
Current Liabilities:
Accounts payable
Current portion oI bank loan
Liability - reIundable deposits
Sales taxes payable
Accrued interest payable
Total current liabilities
Long-Term Liabilities:
Bank loan to be reIinanced on a long-term basis
13-2
2011
Date Account Titles / Explanations Debit Credit
Cash
Notes payable
Sales taxes payable
Cash
Liability - reIundable deposits
Interest expense
Interest payable
Accounts receivable
Sales revenue
2012
Cash
Cash
Bonds payable
Blanton Plastics
Liability - reIundable deposits
Cash
Interest expense
Check - -
Name: Date:
Prob:
1
A CalculaLlons
8
C
u
2
A CalculaLlons
8
C
u
3
2011
2012
WhaL amounL should Cum reporL as esLlmaLed warranLy llablllLy ln lLs uecember 31 2012 balance sheeL?
A CalculaLlons
8
C
u
21000 $
22300 $
36000 $
CPA
norLh Corp has an employee beneflL plan for compensaLed absences LhaL glves employees 10 pald vacaLlon days
and 10 pald slck days 8oLh vacaLlon and slck days can be carrled over lndeflnlLely Lmployees can elecL Lo recelve
paymenL ln lleu of vacaLlon days however no paymenL ls glven for slck days noL Laken AL uecember 31 2011
norLh's unad[usLed balance of llablllLy for compensaLed absences was $ 21000 norLh esLlmaLed LhaL Lhere were 130
vacaLlon days and 73 slck days avallable aL uecember 31 2011 norLh's employees earn an average of $ 100 per day
ln lLs uecember 31 2011 balance sheeL whaL amounL of llablllLy for compensaLed absences ls norLh requlred Lo
reporL?
13000 $
$ 0
800000 $
1000000 $
1300000 $
ln May 2008 Caso Co flled sulL agalnsL Wayne lnc seeklng $ 1900000 ln damages for paLenL lnfrlngemenL A courL
verdlcL ln november 2011 awarded Caso $1300000 ln damages buL Wayne's appeal ls noL expecLed Lo be declded
before 2013 Caso's counsel belleves lL ls probable LhaL Caso wlll be successful agalnsL Wayne for an esLlmaLed
amounL ln Lhe range beLween $ 800000 and $ 1100000 wlLh $ 1000000 consldered Lhe mosL llkely amounL WhaL
amounL should Caso record as lncome from Lhe lawsulL ln Lhe year ended uecember 31 2011?
2300 $
11230 $
14230 $
4230 $
uurlng 2011 Cum Co lnLroduced a new producL carrylng a Lwo year warranLy agalnsL defecLs 1he esLlmaLed
warranLy cosLs relaLed Lo dollar sales are 2 wlLhln 12 monLhs followlng Lhe sale and 4 ln Lhe second 12 monLhs
followlng Lhe sale Sales and acLual warranLy expendlLures for Lhe years ended uecember 31 2011 and 2012 are as
follows
AcLual WarranLy
LxpendlLures
2230 $
7300
9730 $
Sales
130000 $
230000
400000 $
Name: Date:
ReIer to the Dell Annual Report to answer the Iollowing questions.
1
Chg.
2 Footnotes
a. What Iootnote lists the breakdown oI the amounts Ior "Accrued and other"?
b. What Iootnote adresses commercial paper and short-term borrowing?
c. What Iootnote discusses Commitments and Contingencies?
d. When does Dell record warranty liabilities?
e. When does Dell accrue Ior a loss contingency?
3 In what section oI the Statement oI Cash Flows are changes in current liabilities reported?
4
Changes in accounts payable.
Changes in deIerred service revenue.
Changes in accrued and other liabilities.
5
FASB CodiIication
Access the FASB CodiIication to prepare responses to the Iollowing .
Site: http://aaahq.org/ascLogin.cIm User ID: Password: Until August 31
Password:
1 Use the master glossary to deIine "contingency".
2 What is the three digit topic reIerence Ior liabilities? Contingencies?
a. Liabilities
b. Contingencies
3
4
5
During the most recent year, are the Iollowing reported as cash inIlows or cash outIlows on the Statement oI Cash
Flows?
Current liabilities:
2009 2008
List and total the current liabilities reported on the Balance Sheet. Indicate the amount and percentage oI change
Irom the prior year.
$ Change
Short-termdeIerred service revenue
Total current liabilities
Short-term debt
Accounts payable
Accrued and other
What is the Iive digit reIerence which represents access to the "overall" inIormation on deIerred revenue?
Provide total codiIication reIerences (including paragraph numbers) Ior how loss contingencies are recognized aIter
the date oI the Iinancial statements:
What is the seven digit reIerence which represents access to the "disclosure" inIormation on loss contingencies?
Did the Company have any loss contingencies established Ior probable litigation claims? (yes or no)
AAA51332 SeLxsmc
S6dDwFS September 1, 2011
The FASB Accounting Standards Codification (ASC) represents the single source oI authoritative U.S. generally accepted
accounting principles.