Chapter 13: 6IFRS (page 658)
Consider the bond investment by Lady Gaga in IFRS17-5. Discuss the accounting for this investment if Lady Gaga’s
Business model is to hold the investment to collect interest while outstanding and to receive the principal at maturity.
Given investment is classified as held-for-collection.
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On January 1, 2017, Roosevelt Company purchased 12% bonds, having a maturity value of
The bonds provide the bondholders with a 10% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest
received January 1 of each year. Roosevelt’s business model is to hold these bonds to collect contractual cash flows.
Instructions
(a) Prepare the journal entry at the date of the bond purchase.
(b) Prepare a bond amortization schedule.
(c) Prepare the journal entry to record the interest revenue and the amortization for 2017.
(d) Prepare the journal entry to record the interest revenue and the amortization for 2018
Question: What evidence is necessary to demonstrate the ability to defer settlement of short-term debt?
(Gain on Sale of Investments and Comprehensive Income) On January 1, 2017, Acker Inc. had the followingbalance sheet.
The accumulated other comprehensive income related to unrealized holding gains on available-for-sale debt securities. The fairvalue of Acker Inc.’s available-for-sale debt securities at December 31, 2017, was
were purchased during the year. Acker Inc.’s income statement for 2017 was as follows. (Ignore income taxes.)
ACKER INC.
BALANCE SHEET
AS OF JANUARY 1, 2017
Assets Equity
Cash
Debt investments (available-for-sale) 240,000 Accumulated other comprehensive income 30,000
Total
ACKER INC.
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017
Dividend revenue \( 5,000
Gain on sale of investments 30,000
Net income \)35,000
Instructions
(Assume all transactions during the year were for cash.)
(a) Prepare the journal entry to record the sale of the available-for-sale debt securities in 2017.
(b) Prepare the journal entry to record the Unrealized Holding Gain or Loss for 2017.
(c) Prepare a statement of comprehensive income for 2017.
(d) Prepare a balance sheet as of December 31, 2017.
(Multiple-Step and Single-Step Statements) Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2017 information related to P. Bride Company (\(000 omitted).
Administrative expense
Officers’ salaries \)4,900
Depreciation of office furniture and equipment \(3,960
Cost of goods sold \)60,570
Rent revenue \(17,230
Selling expense
Delivery expense \)2,690
Sales commissions \(7,980
Depreciation of sales equipment \)6,480
Sales revenue \(96,500
Income tax \)9,070
Interest expense $1,860
Instructions
Question: E13-1 (L01) (Balance Sheet Classification of Various Liabilities) How would each of the following items be reported on the balance sheet? (a) Accrued vacation pay. (j) Premium offers outstanding. (b) Estimated taxes payable. (k) Discount on notes payable. (c) Service warranties on appliance sales. (l) Personal injury claim pending. (d) Bank overdraft. (m) Current maturities of long-term debts to be paid (e) Employee payroll deductions unremitted. from current assets. (f) Unpaid bonus to officers. (n) Cash dividends declared but unpaid. (g) Deposit received from customer to guarantee (o) Dividends in arrears on preferred stock. performance of a contract. (p) Loans from officers. (h) Sales taxes payable. (i) Gift certificates sold to customers but not yet redeemed.
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