ACC Tax ch 13 5a) Tim’s Academy had $6,055,000 of bonds payable due in 2017.Prio

Question

ACC Tax ch 13

5a) Tim’s Academy had $6,055,000 of bonds payable due in 2017.Prior to 12/31/2016, Tim refinanced $1,134,700 of the bonds to mature in 2027.On January 15, 2017, Tim refinanced another $1,397,800of the bonds to mature in 2024.Tim issued its financial statements on February 1, 2017.On February 15, 2017, Tim refinanced the remaining amount of the bonds to mature in 2025.In its 2016 financial statements, under IFRS Tim should show Noncurrent bonds payable of: $____________________

5b) Brand Name Appliances sells major appliances that carry a one-year manufacturer’s warranty. Customers are offered the opportunity at the time of purchase to also buy a three-year extended warranty for an additional charge. On January 3, 2016, Brand Name sold $9,900 of extended warranties,

How much is the remaining liability as of December 31, 2016?

Explanation / Answer

1. Noncurrent bonds payable = 6055000+1134700+1397800= 8587500

2. Remaining liability as of December 31,2016= (9900*2/3) = 6600

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