Indra Trichy Vijayakumr Chapter 13 Brief Exercises 13-1) July 1 Purchases Accounts payable Freight -in Cash July

3 Accounts payable Purchase returns 60,000 60,000 1,200 1,200 6,000 6,000 54,000 52,920 1,080

July

10 Accounts payable Cash Purchase discounts

13-2) Nov 1 Cash Notes payable 40,000 40,000 600 600 40,000 600 300 40,900

Dec

31 Interest expense Interest payable Notes payable Interest payable Interest expense Cash

Feb 1

13-3) Nov 1

Cash Discounts on notes payable Notes payable

60,000 1,350 61,350 900 900 450 450 61,350 61,350

Dec

31 Interest expense Discounts on notes payable Interest expense Discount on notes payable Notes payable Cash

Feb 1

13-4) a)

Intent and ability are the two criterias to be met for the liability to be classified as current liability, $500,000 is classified as long term liability.

Indra Trichy Vijayakumr b) 13-5) Aug 1 The entire $500,000 reported as current liabilities

Cash Unearned service revenue

216,000 216,000 90,000 90,000

Dec

31 Unearned service revenue Service revenue

13-6) a)

Accounts receivable Sales Sales tax payable Cash Sales Sales tax payable

31,800 30,000 1,800 20,670 19,500 1,170

b)

13-7) Payroll expense FICA taxes payable Federal tax payable State tax payable Insurance premium payable Cash 13-8) Dec 31 Wages expense Wages payable 13-10) a) Dec 31 Lawsuit loss Lawsuit liability b) No entry 24,000 1,836 2,990 920 250 18,004

30,000 30,000

900,000 900,000

13-13)

Warranty expense Cash Warranty expense Estimated warranty liability

70,000 70,000 400,000 400,000

Indra Trichy Vijayakumr

Exercises 13-3) Current liabilities: Notes payable Long term liabilities: Notes payable 13-13) a) b) c) 13-14) a) ALEXANDER COMPANY December 31,2012 300,000 900,000

$800,000 is reported as liability for contingency and $1,400,000 is disclosed Report loss of $6,000,000 and not do not report insurance premium until recognized Gain contingency because it is more than book value so it is not reported until incurred

Depot cash Depot Asset retirement obligation

600,000 600,000 39,087 39,087 60,000 60,000 3,909 3,909 2,345 2,345 70,000 10,000 80,000

b)

Depreciation expense Acc. Depreciation Depreciation expense Acc. Depreciation Interest expense Asset retirement obligation

c)

Asset retirement obligation Loss on asset retirement oblig. Cash

13-16) 1 2 3 4 5 6 7 8 9 10 Assets I NE NE I NE I D NE NE I Liabilities I NE I I I I I I I I Owners' equity NE NE D NE D I D D D NE Net Income NE NE D NE D I D D D NE

Indra Trichy Vijayakumr 11 12 13 14 15 16 17 18 NE NE NE D D NE NE I I I D NE D I D D D NE D I D D D D NE D I D