Long-Term Liabilities and Investments

Size: px
Start display at page:

Download "Long-Term Liabilities and Investments"

Transcription

1 Ch 21 Long-Term Liabilities and Investments Understanding bonds Accounting for issuance of bond Retirement of a bond Bond sinking funds Accounting for investments in stocks and bonds Presentation of bonds and investment 1

2 Bonds Payable 2 A Bond An interest-bearing security that represents debt to the issuing corporation Many publicly traded in the securities market Quoted on the bond market at a percent of face value When a corporation borrows money by issuing a bond, it is obligated to make two types of payments: Interest on the bond during the period of time the bond is outstanding Repayment of the bond s principal amount at the maturity date, the date on which the principal must be repaid

3 Bonds Payable The principal of a bond The amount the corporation must repay when the bond matures Bond certificate includes The principal of a bond The bond s rate of interest The date the bond matures 3

4 Advantages of Bonds The issuing corporation may be able to earn a greater return on the money it receives from the bonds than it must pay out in interest. Leverage The use of funds to earn a greater return than the cost of the borrowed fund Interest paid to bondholders is a tax-deductible business expense, which results in a savings of income taxes. Dividends paid to stockholders are not a tax-deductible business expense. Bondholders do not have voting rights in the corporation. When bonds are issued, funding is obtained but ownership of the corporation remains the same. Issuing bonds does not increase the number of stockholders. If the corporation can increase earnings through leverage, 4 stockholders are in a position to receive more dividends.

5 Disadvantages of Bonds Bondholders receive regular interest payments, even if the issuing corporation is suffering net losses. Defaulting on interest payments can result in legal action and force the corporation into bankruptcy. Bondholders, being creditors, have a prior claim to assets in the event the corporation liquidates. Stockholders claims can only be satisfied when bondholders (and other creditors) have been satisfied in full. At maturity, the principal of the bonds must be repaid to the bondholders, regardless of the profitability of the corporation. 5

6 Classification of Bonds-Time of Payment Term Bonds Bonds that mature at one point in time Serial Bonds Bonds that mature periodically over a number of years Secured Bonds Also called mortgage trust bonds Have a specific asset or assets pledged as collateral for the debt Debenture Bonds Issued on the general credit of the corporation No specific assets pledged as collateral Registered Bonds o Bonds for which the names and addresses of the bondholders are registered with the issuing corporation Coupon Bonds 6 Not registered with the corporation Ownership transferred by delivery of the bonds Interest payments received by presenting an interest coupon to a bank

7 Accounting for the Issuance of Bonds Bond Indenture A contract between the corporation and the bondholders Selling of Bonds Premium Sold for more than face value (M.R. < C.R.) Discount Sold for less than face value (M.R. > C.R.) At Face Value Sold for equal to face value (M.R. = C.R.) Contract Interest Rate The rate of interest stated on the bond certificate Market Interest Rate Also called the effective interest rate The rate prevailing in the bond market at the time the bonds are issued 7

8 Issuing Bonds at Face Value On Jan. 1, 2009, Massey International issued $100,000 of 5%, 10- year debenture bonds at face value, with interest payable semiannually on Jun. 30 and Dec. 31. Massey records the following journal entries for 2009: 2009 Jan. 1 Cash 100,000 Bonds Payable 100,000 Jun. 30 Interest Expense 2,500 Cash 2,500 8 Dec. 31 Interest Expense 2,500 Cash 2,500

9 Issuing Bonds at a Premium On Jan. 1, 2009, Massey International issued $100,000 of 5%, 10- year debenture bonds at 104, with interest payable semiannually on Jun. 30 and Dec. 31. Massey records the following journal entry on Jan. 1, 2009: 2009 Jan. 1 Cash 104,000 Bonds Payable 100,000 Premium on Bonds Payable 4,000 Premium on Bonds Payable Account An adjunct to the Bonds Payable account Its balance is added to the balance of the Bonds Payable account to show the carrying value of the bonds 9

10 Amortization of Bond Premium 2009 Jan. 1 Cash 104,000 Bonds Payable 100,000 Premium on Bonds Payable 4,000 Jun. 30 Interest Expense 2,500 Cash 2,500 Jun. 30 Premium on Bonds Payable 200 Interest Expense 200 Dec. 31 Interest Expense 2,500 Cash 2, Dec. 31 Premium on Bonds Payable 200 Interest Expense 200

11 Discount on Bonds Payable Account A contra liability account Its balance is subtracted from the balance of the Bonds Payable account to show the carrying value of the bonds Example: On Jan. 1, 2009, Massey International issued $100,000 of 5%, 10-year debenture bonds at 97, with interest payable semiannually on Jun. 30 and Dec. 31. Massey records the following journal entry on Jan. 1, 2009: 2009 Jan. 1 Cash 97,000 Discount on Bonds Payable 3,000 Bonds Payable 100,000 11

12 Amortization of Bond Discount 2009 Jan. 1 Cash 97,000 Discount on Bonds Payable 3,000 Bonds Payable 100,000 Jun. 30 Interest Expense 2,500 Cash 2,500 Jun. 30 Interest Expense 150 Discount on Bonds Payable 150 Dec. 31 Interest Expense 2,500 Cash 2,500 Dec. 31 Interest Expense Discount on Bonds Payable 150

13 Retirement of Bonds at Maturity On Jan. 1, 2019, Massey International retired its $100,000, 10- year issue that was dated Jan. 1, Massey records the following journal entry on Jan. 1, 2019: 2019 Jan. 1 Bonds Payable 100,000 Cash 100,000 Issuing Bonds Between Interest Dates Assume Massey s $100,000, 5% bonds are dated Jan. 1, Assume the bonds were sold at face value on Mar. 31, three months into the interest period. The interest accrued from the bond date (Jan. 1) until the date of sale (Mar. 31) is $1,250 ($100, /12). In addition to the market value of the bonds, the bondholders must pay Massey the $1,250 accrued interest. 13

14 Issuing Bonds Between Interest Dates Massey records the following journal entry on Mar. 31, 2009: 2009 Mar. 31 Cash 101,250 Bonds Payable 100,000 Interest Payable 1,250 On Jun. 30, 2009, Massey records its first interest payable to bondholders: 2009 Jun. 30 Interest Expense 1,250 Interest Payable 1,250 Cash 2,500 14

15 Adjusting Entry for Accrued Interest Expense Assume on Apr. 1, 20X4, F. J. Ingrum Company issued $50,000 of 6%, 10-year bonds at face value. The bonds pay interest semiannually on Apr. 1 and Oct. 1. On Oct. 1, 20X4, Ingrum made the regular semiannual interest payable of $1,500 ($50,000 X.06 X 6/12). The next semiannual interest payment will be made on Apr. 1, 20X5. An adjusting entry for accrued interest must be made on Dec. 31, 20X4. The adjusting entry is prepared for $750 ($50,000 X.06 X 3/12): 20X4 Dec. 31 Interest Expense 750 Interest Payable

16 Adjusting Entry for Accrued Interest Expense On Apr. 1, 20X5, the following entry is made to pay interest expense for the current year and the accrued interest from 20X4: 20X5 Apr. 1 Interest Expense 750 Interest Payable 750 Cash 1,500 16

17 Bond Sinking Fund Like a savings account The balance is used to repay the bond principal when it becomes due. As a measure of security for bondholders, the bond agreement may specify that the issuing corporation make annual deposits into a bond sinking fund. Accounting for a Bond Sinking Fund Sinking Fund Cash account 17 An asset Debit when cash is deposited in a bond sinking fund Credit Cash account

18 Accounting for a Bond Sinking Fund Sinking Fund Investments account An asset Debit when investments are purchased from the fund Credit Sinking Fund Cash account Sinking Fund Income account Credit when earnings are received from the investments Debit Sinking Fund Cash account 18

19 Journal Entries for a Bond Sinking Fund Assume Marsh Electronics Corporation issued $100,000 worth of 10-year bonds dated Jan. 1, 20X0. The bond agreement calls for equal annual deposits in a sinking fund. Marsh estimates that money deposited in the sinking fund can be invested in securities that will provide an annual yield of about 5%. The amount to be deposited in the fund annually is $7,975. The entry to record the annual deposit of cash in the bond sinking fund is as follows: 19 20X0 Jan. 1 Sinking Fund Cash 7,975 Cash 7,975

20 Journal Entries for a Bond Sinking Fund The entry to record the purchase of investments for $6,000 from the fund is as follows: 20X0 Jan. 1 Sinking Fund Investments 6,000 Sinking Fund Cash 6,000 The entry to record the receipt of $310 income from investments on Dec. 31, 20X0 is as follows: 20X0 Dec. 31 Sinking Fund Cash 310 Sinking Fund Income 310 Assume at the end of the 10 th year the cost of the investments was $84,100. The company was able to sell the investments for $86, X9 31 Sinking Fund Cash 86,400 Dec. 20 Sinking Fund Investments 84,100 Gain on Sale of Investments 2,300

21 Financial Statement Presentation of Sinking Fund Accounts Sinking Fund Cash/Sinking Fund Investments are presented on the balance sheet as Investments, a section appearing after Current Assets. Sinking Fund Income is presented on the income statement as Other Income. 21

22 Investments in Stocks and Bonds Equity Securities Investments in stocks issued by corporations Debt Securities Investments in debt instruments (bonds and notes) issued by a corporation or a governmental unit Equity Securities On Mar. 23, 20X1, Tampa Development Company purchased 500 shares of Neil Corporation s common stock for $15 per share, plus a broker s commission of $300. On Dec. 15, 20X1, Neil pays a $1 dividend per share. The journal entries prepared by Tampa during 20X1 are as follows: 22 20X1 Mar. 23 Investment in Neil Corporation Stock 7,800 Cash 7,800 Dec. 15 Cash 500 Dividend Income 500

23 More on Equity Securities Assume on Mar. 10, 20X2, Tampa sold 100 shares of the Neil stock for $21 per share, paying a commission of $80 to the broker who arranged the sale. The cost basis per share of the investment is $7, shares = $15.60 The total cost basis of the shares sold = $ = $1,560 The proceeds from the sale of the stock = ($21 100) $80 = $2,020 The entry to sell the 100 shares of stock is as follows: 23 20X2 Mar. 10 Cash 2,020 Investment in Neil Corporation Stock 1,560 Gain on Sale of Investments 460

24 Debt Securities On Jan. 1, 20X5, Bagley Chemical Company purchased $50,000 worth of Box Corporation s 6% bonds, with interest payable on Jan. 1 and Jul. 1. The bonds were purchased at 98, and a $300 commission was paid. On Jul. 1, 20X5, Bagley received a semiannual interest check for $1,500 from the Box bonds. Bagley prepared the following entries in 20X5: 20X5 Jan. 1 Investment in Box Corporation Bonds 49,300 Cash 49, Jul. 1 Cash 1,500 Interest Income 1,500

25 Purchasing Bonds Between Interest Dates Assume that Bagley purchased the Box bonds on Feb. 1, 20X5, one month after the issue of the bonds. Bagley will pay Box interest that has accrued for one month. Bagley s entry to record the purchase is as follows: 20X5 Feb. 1 Investment in Box Corporation Bonds 49,300 Interest Receivable 250 Cash 49,550 On Jul. 1, 20X5, Bagley records receipt of the first interest check as follows: 25 20X5 Jul. 1 Cash 1,500 Interest Income 1,250 Interest Receivable 250

26 Financial Statement Presentation of Investment Accounts Temporary Investment Liquid Management intends to convert it to cash within one year Long-Term Investment Management intends to hold longer than one year 26

27 27

28 28

ACCT 101 Bonds LECTURE NOTES CH. 10 Prof. Johnson

ACCT 101 Bonds LECTURE NOTES CH. 10 Prof. Johnson ACCT 101 Bonds LECTURE NOTES CH. 10 Prof. Johnson BASICS OF BONDS How corporations are financed Corporations raise cash from outside parties by: 1. Equity Financing. This involves issuing common or preferred

More information

Reporting and Interpreting Bonds

Reporting and Interpreting Bonds Reporting and Interpreting Bonds CHAPTER 10 McGraw-Hill/Irwin 2009 The McGraw-Hill Companies, Inc. Not Barry and not James Slide 2 Understanding the Business The mixture of debt and equity used to finance

More information

ACCOUNTING - CLUTCH CH LONG TERM LIABILITIES.

ACCOUNTING - CLUTCH CH LONG TERM LIABILITIES. !! www.clutchprep.com CONCEPT: INTRODUCTION TO BONDS AND BOND CHARACTERISTICS Bonds Payable are groups of debt securities issued to lenders Example: Company wants to raise $1,000,000. The company can sell

More information

Long-Term Liabilities. Record and Report Long-Term Liabilities

Long-Term Liabilities. Record and Report Long-Term Liabilities SECTION Long-Term Liabilities VII OVERVIEW What this section does This section explains transactions, calculations, and financial statement presentation of long-term liabilities, primarily bonds and notes

More information

John J. Wild Sixth Edition

John J. Wild Sixth Edition Financial Accounting John J. Wild Sixth Edition McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 10 Reporting and Analyzing Long-Term Liabilities Conceptual

More information

ACCOUNTING FOR BONDS

ACCOUNTING FOR BONDS ACCOUNTING FOR BONDS Key Terms and Concepts to Know Bonds are a medium to long-term financing alternative to issuing stock. Bonds are issued or sold face amount or par, at a discount if they pay less than

More information

Long-Term Liabilities C AT EDRÁTICO U PR R I O P I EDRAS S EG. S EM

Long-Term Liabilities C AT EDRÁTICO U PR R I O P I EDRAS S EG. S EM Long-Term Liabilities E DWIN R ENÁN MALDONADO C AT EDRÁTICO U PR R I O P I EDRAS S EG. S EM. 2 017-18 Textbook: Financial Accounting, Spiceland This presentation contains information, in addition to the

More information

Chapter 15 Long-Term Liabilities

Chapter 15 Long-Term Liabilities Chapter 15 Long-Term Liabilities CHAPTER OVERVIEW In Chapters 13 and 14 you learned about topics related to shareholders equity. Contributed capital is a major source of funds for corporations. However,

More information

Lesson 9 Debt and Equity Financing

Lesson 9 Debt and Equity Financing Lesson 9 Balance Sheet Lesson 9 Debt and Equity Financing Assets: Current Assets: Accounts receivable Less: Allowance for Uncollectible A/R Inventories Prepaid Expenses Long-Term Assets: Property and Equipment

More information

Chapter Ten, Debt Financing: Bonds of Introduction to Financial Accounting online text, by Henry Dauderis and David Annand is available under

Chapter Ten, Debt Financing: Bonds of Introduction to Financial Accounting online text, by Henry Dauderis and David Annand is available under Chapter Ten, Debt Financing: Bonds of Introduction to Financial Accounting online text, by Henry Dauderis and David Annand is available under Creative Commons Attribution-NonCommercial- ShareAlike 4.0

More information

Copyright 2009 The Learning House, Inc. Income Taxes and Investments Page 1 of 17

Copyright 2009 The Learning House, Inc. Income Taxes and Investments Page 1 of 17 Copyright 2009 The Learning House, Inc. Income Taxes and Investments Page 1 of 17 Introduction Taxes are a significant expense for most companies and must be considered when analyzing a company. Differences

More information

XML Publisher Balance Sheet Vision Operations (USA) Feb-02

XML Publisher Balance Sheet Vision Operations (USA) Feb-02 Page:1 Apr-01 May-01 Jun-01 Jul-01 ASSETS Current Assets Cash and Short Term Investments 15,862,304 51,998,607 9,198,226 Accounts Receivable - Net of Allowance 2,560,786

More information

Bonds and Their Value

Bonds and Their Value 140 Yost Rocks, Inc. wants to borrow money, and it decides to issue bonds. Each bondholder lends the firm money today for 30 years at 12 percent interest.yost Rocks pays each bondholder $120 per year and

More information

Corporate Accounting: Formation and Paid-In Capital

Corporate Accounting: Formation and Paid-In Capital Ch.19 Corporate Accounting: Formation and Paid-In Capital Corporate Form of Business Paid-in Capital and Earned Capital Classification of Capital Stock Issuance of Capital Stock Stockholders Equity Reacquisition

More information

Click to edit Master title style

Click to edit Master title style 1 Adeng Pustikaningsih, M.Si. Dosen Jurusan Pendidikan Akuntansi Fakultas Ekonomi Universitas Negeri Yogyakarta CP: 08 222 180 1695 Email : adengpustikaningsih@uny.ac.id 1 2 15 Bonds Payable and Investments

More information

1. Classification of Debt and Measurement Issues

1. Classification of Debt and Measurement Issues Chapter 12 Debt Financing 1. Classification and measurement issues associated with debt 2. Accounting for short-term debt 3. Accounting for long-term debt (mortgages) 4. Understand the various types of

More information

Chapter 10 - REPORTING AND ANALYZING LIABILITIES

Chapter 10 - REPORTING AND ANALYZING LIABILITIES Revised Summer 2018 Chapter 10 Review 1 Chapter 10 - REPORTING AND ANALYZING LIABILITIES LO 1: Explain how to account for current liabilities. Current Liability: a debt that a company expects to pay 1.

More information

> DO IT! Chapter 15 Long-Term Liabilities. Bond Terminology. Bond Issuance D-69. Solution. Solution

> DO IT! Chapter 15 Long-Term Liabilities. Bond Terminology. Bond Issuance D-69. Solution. Solution Chapter 15 Long-Term Liabilities Bond Terminology Review the types of bonds and the basic terms associated with bonds. State whether each of the following statements is true or false. 1. Mortgage bonds

More information

BUS210. Accounting for Financing Decisions: Long-Term Liabilities

BUS210. Accounting for Financing Decisions: Long-Term Liabilities BUS210 Accounting for Financing Decisions: Long-Term Liabilities Liabilities Current or Short-term Liabilities Long-term Debt (borrowed funds) Lease Liabilities Deferred Taxes Contingencies and Commitments

More information

Fill-in-the-Blank Equations. Exercises

Fill-in-the-Blank Equations. Exercises Chapter 15 Investments and Fair Value Accounting Study Guide Solutions 1. Accrued interest 2. Dividends Fill-in-the-Blank Equations 3. Market price per share of common stock Exercises 1. A corporation

More information

(Internet version) Financial & Statistical Report November 2018

(Internet version) Financial & Statistical Report November 2018 (Internet version) Financial & Statistical Report November 2018 12/17/2018 Statement of Operations For the Period Ended November 30, 2018 (in millions) Current Month Year-to-Date Operating Revenue $ 31.4

More information

(Internet version) Financial & Statistical Report December 2017

(Internet version) Financial & Statistical Report December 2017 (Internet version) Financial & Statistical Report December 2017 01/22/2018 Statement of Operations For the Period Ended December 31, 2017 (in millions) Current Month Year-to-Date Operating Revenue & Patronage

More information

(Internet version) Financial & Statistical Report December 2016

(Internet version) Financial & Statistical Report December 2016 (Internet version) Financial & Statistical Report December 2016 1/23/2017 Statement of Operations For the Period Ended December 31, 2016 (in millions) Current Month Year-to-Date Operating Revenue & Patronage

More information

(Internet version) Financial & Statistical Report September 2017

(Internet version) Financial & Statistical Report September 2017 (Internet version) Financial & Statistical Report September 2017 10/23/2017 Statement of Operations For the Period Ended September 30, 2017 (in millions) Current Month Year-to-Date Operating Revenue &

More information

BANK OF GUYANA. BANKING SYSTEM STATISTICAL ABSTRACT Website:

BANK OF GUYANA. BANKING SYSTEM STATISTICAL ABSTRACT Website: BANK OF GUYANA BANKING SYSTEM STATISTICAL ABSTRACT Website: www.bankofguyana.org.gy RESEARCH DEPARTMENT March 2010 STATISTICAL ABSTRACT TABLES CONTENTS 1. MONETARY AUTHORITY 1.1 Bank of Guyana: Assets

More information

FIN 684 Fixed-Income Analysis Corporate Debt Securities

FIN 684 Fixed-Income Analysis Corporate Debt Securities FIN 684 Fixed-Income Analysis Corporate Debt Securities Professor Robert B.H. Hauswald Kogod School of Business, AU Corporate Debt Securities Financial obligations of a corporation that have priority over

More information

Bonds and Long-term Notes

Bonds and Long-term Notes Section 11 Bonds & PV Tables (Noncurrent Liabilities) 14-1 Bonds and Long-term Notes The Nature of Long-Term Debt Liabilities signify creditors interest in a company s assets. note payable and note receivable:

More information

PRESS RELEASE. Securities issued by Hungarian residents and breakdown by holding sectors. January 2019

PRESS RELEASE. Securities issued by Hungarian residents and breakdown by holding sectors. January 2019 7 March 2019 PRESS RELEASE Securities issued by Hungarian residents and breakdown by holding sectors January 2019 According to securities statistics, the amount outstanding of equity securities and debt

More information

Corporate Accounting: Earnings and Distribution

Corporate Accounting: Earnings and Distribution Chapter 20 Corporate Accounting: Earnings and Distribution Net income of a corporation and corporate income taxes Cash dividends Stock dividends Stock splits Appropriations of retained earnings Retained

More information

Appendix D Investments Study Guide Solutions Fill-in-the-Blank Equations. Exercises. 1. Accrued interest 2. Dividends

Appendix D Investments Study Guide Solutions Fill-in-the-Blank Equations. Exercises. 1. Accrued interest 2. Dividends Appendix D Investments Study Guide Solutions Fill-in-the-Blank Equations 1. Accrued interest 2. Dividends Exercises 1. A corporation has excess cash due to the introduction of a new product. The corporation

More information

Gleim CPA Test Prep: Financial (137 questions)

Gleim CPA Test Prep: Financial (137 questions) [1] Gleim #: 12.1.1 -- Source: CPA 1189 T-18 Bonds payable issued with scheduled maturities at various dates are called Serial Bonds Term Bonds No Yes No No Yes No Yes Yes [2] Gleim #: 12.1.2 -- Source:

More information

about this mortgage 1. About this illustration

about this mortgage 1. About this illustration about this mortgage Personalised illustration for: James Sample & Vicky Sample Date produced: Any Date Valid until: This illustration is valid only on the date produced. This is not a legally binding mortgage

More information

University of Wisconsin - Madison Retirement Association Fundamental Concepts of Investing. September 15, Jim Hamre Steve Hawk

University of Wisconsin - Madison Retirement Association Fundamental Concepts of Investing. September 15, Jim Hamre Steve Hawk University of Wisconsin - Madison Retirement Association Fundamental Concepts of Investing September 15, 2009 Jim Hamre Steve Hawk 1 Investment Environment Large Federal Budget Deficits Potential for Higher

More information

Chapter. Corporate Bonds. Corporate Bonds. Corporate Bond Basics, I. Corporate Bond Basics, II. Corporate Bond Basics, III. Types of Corporate Bonds

Chapter. Corporate Bonds. Corporate Bonds. Corporate Bond Basics, I. Corporate Bond Basics, II. Corporate Bond Basics, III. Types of Corporate Bonds Chapter 18 Corporate Bonds Corporate Bonds Our goal in this chapter is to introduce the specialized knowledge concerning trading corporate bonds. Money managers who buy and sell corporate bonds possess

More information

LONG-TERM LIABILITIES

LONG-TERM LIABILITIES Chapter 14 LONG-TERM LIABILITIES PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA Winston Kwok, Ph.D.,

More information

BUS512M Session 9. Accounting for Financing Decisions: Long-Term Liabilities and Stockholders Equity

BUS512M Session 9. Accounting for Financing Decisions: Long-Term Liabilities and Stockholders Equity BUS512M Session 9 Accounting for Financing Decisions: Long-Term Liabilities and Stockholders Equity Liabilities Current or Short-term Liabilities Long-term Debt (borrowed funds) Lease Liabilities Deferred

More information

PRESS RELEASE. Securities issued by Hungarian residents and breakdown by holding sectors. October 2018

PRESS RELEASE. Securities issued by Hungarian residents and breakdown by holding sectors. October 2018 PRESS RELEASE 10 December 2018 Securities issued by Hungarian residents and breakdown by holding sectors October 2018 According to securities statistics, the amount outstanding of equity securities and

More information

ACCT-112 Final Exam Practice Solutions

ACCT-112 Final Exam Practice Solutions ACCT-112 Final Exam Practice Solutions Question 1 Jan 1 Cash 200,000 H. Happee, Capital 200,000 Jan 2 Prepaid Insurance 10,000 Cash 10,000 Jan 15 Equipment 15,000 Cash 5,000 Notes Payable 10,000 Jan 30

More information

Accounting for Long. Different Ways to Finance a Company. u Borrowing from a Bank (Ch 9): Notes Payable More expensive and restrictive than bonds.

Accounting for Long. Different Ways to Finance a Company. u Borrowing from a Bank (Ch 9): Notes Payable More expensive and restrictive than bonds. Accounting for Long Term Liabilities Ch 10 Acc 1a Different Ways to Finance a Company u Borrowing from a Bank (Ch 9): Notes Payable More expensive and restrictive than bonds. u Selling Stock (Ch 11): Gives

More information

1 Long Term Debt $ 9,298,554 $ (250,000) $ 9,048, Preferred Stock 30,450 30, % 5 Common Equity 250, %

1 Long Term Debt $ 9,298,554 $ (250,000) $ 9,048, Preferred Stock 30,450 30, % 5 Common Equity 250, % SUMMARY SCHEDULE ($000'S) Schedule 1 Page 1 of 1 Line Capitalization HISTORICAL YEAR ENDED 12/31/16 Hybrid Percent Equity Adjusted of Total Cost of Cost of Amount Adjustment Amount Capitalization Capital

More information

BANK OF GUYANA. BANKING SYSTEM STATISTICAL ABSTRACT Website:

BANK OF GUYANA. BANKING SYSTEM STATISTICAL ABSTRACT Website: BANK OF GUYANA BANKING SYSTEM STATISTICAL ABSTRACT Website: www.bankofguyana.org.gy RESEARCH DEPARTMENT November 2010 STATISTICAL ABSTRACT TABLES CONTENTS 1. MONETARY AUTHORITY 1.1 Bank of Guyana: Assets

More information

Orange Unified School District

Orange Unified School District Orange Unified School District Financing Information Ron Lebs Assistant Superintendent, Facilities and Planning Orange Unified School District Tel: 714.628.4500 rlebs@orangeusd.org Adam Bauer Chief Executive

More information

Ch. 13 Practice Questions Solution

Ch. 13 Practice Questions Solution Buad 121 Ch. 13 Practice Questions Solution Exercise 13-9 (20 minutes) a. Mar. 10 Machinery... 60,000 Cash... 60,000 Purchased machinery for cash. b. Mar. 10 Machinery... Accounts Payable... 60,000 60,000

More information

LONG-TERM LIABILITIES

LONG-TERM LIABILITIES Chapter 14 LONG-TERM LIABILITIES PowerPoint Authors: Susan Coomer Galbreath, Ph.D., CPA Charles W. Caldwell, D.B.A., CMA Jon A. Booker, Ph.D., CPA, CIA Cynthia J. Rooney, Ph.D., CPA McGraw-Hill/Irwin Copyright

More information

Copyright 2009 The Learning House, Inc.Organizations, Capital Stock Transactions and Dividends Page 1 of 13

Copyright 2009 The Learning House, Inc.Organizations, Capital Stock Transactions and Dividends Page 1 of 13 Copyright 2009 The Learning House, Inc.Organizations, Capital Stock Transactions and Dividends Page 1 of 13 Introduction A corporation is a legal entity created by law that is separate from its owners.

More information

Definition: present obligations based on past transactions or events that require either future payment or future performance of services

Definition: present obligations based on past transactions or events that require either future payment or future performance of services Liabilities Definition: present obligations based on past transactions or events that require either future payment or future performance of services A liability is a present obligation of the enterprise

More information

PREVIEW OF CHAPTER 14-2

PREVIEW OF CHAPTER 14-2 14-1 PREVIEW OF CHAPTER 14 14-2 Intermediate Accounting IFRS 2nd Edition Kieso, Weygandt, and Warfield 14 Non-Current Liabilities LEARNING OBJECTIVES After studying this chapter, you should be able to:

More information

Investments and Fair Value Accounting

Investments and Fair Value Accounting C H A P T E R 15 Investments and Fair Value Accounting QUIZ AND TEST HINTS The following hints may be helpful to you in preparing for a quiz or a test over the material covered in Chapter 15. 1. This chapter

More information

Financial & Business Highlights For the Year Ended June 30, 2017

Financial & Business Highlights For the Year Ended June 30, 2017 Financial & Business Highlights For the Year Ended June, 17 17 16 15 14 13 12 Profit and Loss Account Operating Revenue 858 590 648 415 172 174 Investment gains net 5 162 909 825 322 516 Other 262 146

More information

COPYRIGHTED MATERIAL FEATURES OF DEBT SECURITIES CHAPTER 1 I. INTRODUCTION

COPYRIGHTED MATERIAL FEATURES OF DEBT SECURITIES CHAPTER 1 I. INTRODUCTION CHAPTER 1 FEATURES OF DEBT SECURITIES I. INTRODUCTION In investment management, the most important decision made is the allocation of funds among asset classes. The two major asset classes are equities

More information

Liabilities. Chapter 10. Learning Objectives. After studying this chapter, you should be able to:

Liabilities. Chapter 10. Learning Objectives. After studying this chapter, you should be able to: 10-1 Chapter 10 Liabilities 10-2 Learning Objectives After studying this chapter, you should be able to: 1. Explain a current liability, and identify the major types of current liabilities. 2. Describe

More information

Financial Statements and Closing Entries for a Merchandising Business

Financial Statements and Closing Entries for a Merchandising Business Ch.10 Financial Statements and Closing Entries for a Merchandising Business o Prepare financial statements for a merchandising business o Journalize adjusting and closing entries for a merchandising business

More information

Supplemental Instruction Handouts Financial Accounting Review Chapters 12, 13, 14 and 16 Answer Key

Supplemental Instruction Handouts Financial Accounting Review Chapters 12, 13, 14 and 16 Answer Key Supplemental Instruction Handouts Financial Accounting Review Chapters 12, 13, 14 and 16 Answer Key 1. Coach Motor Company is authorized by its articles of incorporation to issue an unlimited number of

More information

Prof Albrecht s Notes Example of Complete Accounting Cycle Intermediate Accounting 1

Prof Albrecht s Notes Example of Complete Accounting Cycle Intermediate Accounting 1 Prof Albrecht s Notes Example of Complete Accounting Cycle Intermediate Accounting 1 In this chapter of notes I ll provide a complete example of the accounting cycle. The order of the tasks to complete

More information

Chapter Thirteen In class practice

Chapter Thirteen In class practice Problem 13.1 Chapter Thirteen In class practice Uzi Company received a charter granting the right to issue 200,000 shares of $1 par value common stock and 10,000 shares of 8% cumulative and nonparticipating,

More information

Spheria Australian Smaller Companies Fund

Spheria Australian Smaller Companies Fund 29-Jun-18 $ 2.7686 $ 2.7603 $ 2.7520 28-Jun-18 $ 2.7764 $ 2.7681 $ 2.7598 27-Jun-18 $ 2.7804 $ 2.7721 $ 2.7638 26-Jun-18 $ 2.7857 $ 2.7774 $ 2.7690 25-Jun-18 $ 2.7931 $ 2.7848 $ 2.7764 22-Jun-18 $ 2.7771

More information

WESTWOOD LUTHERAN CHURCH Summary Financial Statement YEAR TO DATE - February 28, Over(Under) Budget WECC Fund Actual Budget

WESTWOOD LUTHERAN CHURCH Summary Financial Statement YEAR TO DATE - February 28, Over(Under) Budget WECC Fund Actual Budget WESTWOOD LUTHERAN CHURCH Summary Financial Statement YEAR TO DATE - February 28, 2018 General Fund Actual A B C D E F WECC Fund Actual Revenue Revenue - Faith Giving 1 $ 213 $ 234 $ (22) - Tuition $ 226

More information

BMO Mutual Funds 2015

BMO Mutual Funds 2015 BMO Mutual Funds 2015 Semi-Annual Financial Statements BMO Short-Term Income Class NOTICE OF NO AUDITOR REVIEW OF THE SEMI-ANNUAL FINANCIAL STATEMENTS BMO Investments Inc., the Manager of the Fund, appoints

More information

FAQ: Statement of Cash Flows

FAQ: Statement of Cash Flows Question 1: What sources are used when the statement of cash flows is being prepared, and what information does each source provide? Answer 1: The statement of cash flows is prepared differently from the

More information

Accounting Self Study Guide for Staff of Micro Finance Institutions Accounting Case Study ANSWERS

Accounting Self Study Guide for Staff of Micro Finance Institutions Accounting Case Study ANSWERS Accounting Self Study Guide for Staff of Micro Finance Institutions Accounting Case Study ANSWERS Calmeadow 1 General Journal Date Account Title and Explanation Ref Debit Credit 1 Jan 6 Travel 524 500

More information

Chapter 13 Statement of Cash Flows Study Guide Solutions Fill-in-the-Blank Equations. Exercises

Chapter 13 Statement of Cash Flows Study Guide Solutions Fill-in-the-Blank Equations. Exercises Chapter 13 Statement of Cash Flows Study Guide Solutions Fill-in-the-Blank Equations 1. Net cash flow from operating activities 2. Change in Cash 3. Cash used to purchase property, plant, and equipment

More information

Chapter 11: Liabilities, on and off balance sheet. General issues Long-term debt, contingent liabilities

Chapter 11: Liabilities, on and off balance sheet. General issues Long-term debt, contingent liabilities Chapter 11: Liabilities, on and off balance sheet General issues Long-term debt, contingent liabilities 1 Liabilities, definition and classification present obligations based on past transactions or events

More information

Algo Trading System RTM

Algo Trading System RTM Year Return 2016 15,17% 2015 29,57% 2014 18,57% 2013 15,64% 2012 13,97% 2011 55,41% 2010 50,98% 2009 48,29% Algo Trading System RTM 89000 79000 69000 59000 49000 39000 29000 19000 9000 2-Jan-09 2-Jan-10

More information

Section 6621 of the Internal Revenue Code establishes the interest rates on

Section 6621 of the Internal Revenue Code establishes the interest rates on Part 1 Section 6621.--Determination of Rate of Interest 26 CFR 301.6621-1: Interest rate. Rev. Rul. -32 Section 6621 of the Internal Revenue Code establishes the interest rates on overpayments and underpayments

More information

Board of Directors October 2018 and YTD Financial Report

Board of Directors October 2018 and YTD Financial Report Board of Directors October 2018 and YTD Financial Report Consolidated Financial Results Operating Margin October ($30,262) $129,301 ($159,563) Year-to-date $292,283 $931,358 ($639,076) Excess of Revenue

More information

CHAPTER 11 ACCOUNTING FOR EQUITY

CHAPTER 11 ACCOUNTING FOR EQUITY CHAPTER 11 ACCOUNTING FOR EQUITY Key Terms and Concepts to Know Forms of business organization and ownership: Sole proprietorship Partnership Corporation Corporations and the advantages of being one Limited

More information

Cost Estimation of a Manufacturing Company

Cost Estimation of a Manufacturing Company Cost Estimation of a Manufacturing Company Name: Business: Date: Economics of One Unit: Manufacturing Company (Only complete if you are making a product, such as a bracelet or beauty product) Economics

More information

Investments in Debt and Equity Securities

Investments in Debt and Equity Securities Ch.14 Investments in Debt and Equity Securities 1. Understand various companies investments 2. Purchase of debt and equity securities 3. Revenue from investment securities 4. Change in fair value of investment

More information

Fiscal Year 2018 Project 1 Annual Budget

Fiscal Year 2018 Project 1 Annual Budget Fiscal Year 2018 Project 1 Annual Budget Table of Contents Table Page Summary 3 Summary of Costs Table 1 4 Treasury Related Expenses Table 2 5 Summary of Full Time Equivalent Table 3 6 Positions Cost-to-Cash

More information

Section 6621(c) provides that for purposes of interest payable under 6601 on any large corporate underpayment, the underpayment

Section 6621(c) provides that for purposes of interest payable under 6601 on any large corporate underpayment, the underpayment Section 6621. Determination of Interest Rate 26 CFR 301.6621 1: Interest rate. Interest rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar

More information

Factor Leave Accruals. Accruing Vacation and Sick Leave

Factor Leave Accruals. Accruing Vacation and Sick Leave Factor Leave Accruals Accruing Vacation and Sick Leave Factor Leave Accruals As part of the transition of non-exempt employees to biweekly pay, the UC Office of the President also requires standardization

More information

Chapter 11. Notes, Bonds, and Leases

Chapter 11. Notes, Bonds, and Leases 1 Chapter 11 Long- Term Liabilities Notes, Bonds, and Leases 2 Long- Term Liabilities Many companies finance their operations and growth opportunities through the use of long term debt instruments: Notes

More information

Unrestricted Cash / Board Designated Cash & Investments December 2014

Unrestricted Cash / Board Designated Cash & Investments December 2014 Unrestricted Cash / Board Designated Cash & Investments December 2014 25.0 20.0 21.0 20.8 18.9 19.9 15.0 10.0 11.5 12.8 11.6 9.1 10.4 9.8 11.1 10.2 9.8 17.0 16.8 15.4 14.7 14.2 14.1 13.6 13.0 12.0 10.2

More information

IMAGIN MEDICAL INC. CONSOLIDATED FINANCIAL STATEMENTS. September 30, and. September 30, (Expressed in Canadian Dollars)

IMAGIN MEDICAL INC. CONSOLIDATED FINANCIAL STATEMENTS. September 30, and. September 30, (Expressed in Canadian Dollars) CONSOLIDATED FINANCIAL STATEMENTS September 30, 2018 and September 30, 2017 (Expressed in Canadian Dollars) Corporate Head Office Suite 600, 890 West Pender St. Vancouver, BC V6C 1L9 See notes to consolidated

More information

Consumer FAQs Comprehensive Credit Reporting. January 2016

Consumer FAQs Comprehensive Credit Reporting. January 2016 Consumer FAQs Comprehensive Credit Reporting January 2016 CONTENTS 03 Credit Report FAQs 03 Why is there new information in my report? 03 How can I tell which lenders are providing CCR information to Equifax

More information

ACCOUNTING FOR NOTES RECEIVABLE

ACCOUNTING FOR NOTES RECEIVABLE ACCOUNTING FOR NOTES RECEIVABLE Key Terms and Concepts to Know Notes Receivable: May have any duration from a day or two up to many years. Long-term notes receivable may be used to finance the purchase

More information

Investment Tips & Techniques

Investment Tips & Techniques Investment Tips & Techniques Ohio Association of Public Treasurers June 15, 2017 Presented by Jason Click President, Public Funds Meeder Investment Management Jason Headings Sr. Vice President, Director

More information

Accrued Interest A currently unpaid amount of interest that has accumulated since the last payment on a bond or other fixed-income security.

Accrued Interest A currently unpaid amount of interest that has accumulated since the last payment on a bond or other fixed-income security. Accrued Interest A currently unpaid amount of interest that has accumulated since the last payment on a bond or other fixed-income security. Ad Valorem Tax Translated as according to value, it is a levy

More information

QUARTERLY FINANCIAL REPORT December 31, 2017

QUARTERLY FINANCIAL REPORT December 31, 2017 California Independent System Operator QUARTERLY FINANCIAL REPORT December 31, 2017 Preliminary and Unaudited 250 Outcropping Way Folsom, CA 95630 (916) 351-4000 CALIFORNIA INDEPENDENT SYSTEM OPERATOR

More information

PRESS RELEASE. Securities issued by Hungarian residents and breakdown by holding sectors. October 2017

PRESS RELEASE. Securities issued by Hungarian residents and breakdown by holding sectors. October 2017 11 December 2017 PRESS RELEASE Securities issued by Hungarian residents and breakdown by holding sectors October 2017 According to securities statistics, the amount outstanding of equity securities and

More information

QUARTERLY FINANCIAL REPORT March 31, 2018

QUARTERLY FINANCIAL REPORT March 31, 2018 California Independent System Operator QUARTERLY FINANCIAL REPORT March 31, 2018 250 Outcropping Way Folsom, CA 95630 (916) 351-4000 CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION QUARTERLY FINANCIAL

More information

HIPIOWA - IOWA COMPREHENSIVE HEALTH ASSOCIATION Unaudited Balance Sheet As of July 31

HIPIOWA - IOWA COMPREHENSIVE HEALTH ASSOCIATION Unaudited Balance Sheet As of July 31 Unaudited Balance Sheet As of July 31 Total Enrollment: 407 Assets: Cash $ 9,541,661 $ 1,237,950 Invested Cash 781,689 8,630,624 Premiums Receivable 16,445 299,134 Prepaid 32,930 34,403 Assessments Receivable

More information

Review of Registered Charites Compliance Rates with Annual Reporting Requirements 2016

Review of Registered Charites Compliance Rates with Annual Reporting Requirements 2016 Review of Registered Charites Compliance Rates with Annual Reporting Requirements 2016 October 2017 The Charities Regulator, in accordance with the provisions of section 14 of the Charities Act 2009, carried

More information

SmallBizU WORKSHEET 1: REQUIRED START-UP FUNDS. Online elearning Classroom. Item Required Amount ($) Fixed Assets. 1 -Buildings $ 2 -Land $

SmallBizU WORKSHEET 1: REQUIRED START-UP FUNDS. Online elearning Classroom. Item Required Amount ($) Fixed Assets. 1 -Buildings $ 2 -Land $ WORKSHEET 1: REQUIRED START-UP FUNDS Item Required Amount () Fixed Assets 1 -Buildings 2 -Land 3 -Initial Inventory 4 -Equipment 5 -Furniture and Fixtures 6 -Vehicles 7 Total Fixed Assets Working Capital

More information

HIPIOWA - IOWA COMPREHENSIVE HEALTH ASSOCIATION Unaudited Balance Sheet As of January 31

HIPIOWA - IOWA COMPREHENSIVE HEALTH ASSOCIATION Unaudited Balance Sheet As of January 31 Unaudited Balance Sheet As of January 31 Total Enrollment: 371 Assets: Cash $ 1,408,868 $ 1,375,117 Invested Cash 4,664,286 4,136,167 Premiums Receivable 94,152 91,261 Prepaid 32,270 33,421 Assessments

More information

QUARTERLY FINANCIAL REPORT June 30, 2017

QUARTERLY FINANCIAL REPORT June 30, 2017 California Independent System Operator QUARTERLY FINANCIAL REPORT June 30, 2017 250 Outcropping Way Folsom, CA 95630 (916) 351-4000 CALIFORNIA INDEPENDENT SYSTEM OPERATOR CORPORATION QUARTERLY FINANCIAL

More information

Fundamentals of Accounting Resources

Fundamentals of Accounting Resources Contents Figure 1 - The Profit and Loss statement example... 2 Figure 2 - Balance sheet example... 3 Figure 3 - Example of a Balance Sheet... 4 Figure 4 - Example of a Profit & Loss Sheet... 5 Figure 5-10

More information

ACCT 101 GROUP PROJECT INSTRUCTIONS

ACCT 101 GROUP PROJECT INSTRUCTIONS ACCT 101 GROUP PROJECT INSTRUCTIONS This project is to be completed as a group. All group members should actively participate in the project and it is up to the group to decide who will be responsible

More information

Trust Fund Loans: Interest Charges and Credit Reductions National Employment Law Project UI Conference December 5-6, 2011

Trust Fund Loans: Interest Charges and Credit Reductions National Employment Law Project UI Conference December 5-6, 2011 Trust Fund Loans: Interest Charges and Credit Reductions National Employment Law Project UI Conference December 5-6, 2011 Mike Miller U.S. Department of Labor Topics Current and projected Title XII loans

More information

ACCT 434: Advanced Financial Accounting Module 01 Activities

ACCT 434: Advanced Financial Accounting Module 01 Activities ACCT 434: Advanced Financial Accounting Module 01 Activities Question 1 Part 1: On January 1, 2014, Phantom Corp. acquires $300,000 of Spider Inc. 9% bonds. The interest is payable each June 30 and December

More information

Statistical Appendix

Statistical Appendix ANNUAL REPORT 2006 Statistical Appendix Statistical Appendix Classification and Presentation of Data on Claims and Liabilities Data on financial institutions claims and liabilities are classified according

More information

Buad 195 Chapter 4 Example Solutions, Pre-Midterm Page 1 of 9

Buad 195 Chapter 4 Example Solutions, Pre-Midterm Page 1 of 9 Buad 195 Chapter 4 Example Solutions, Pre-Midterm Page 1 of 9 Example 1 4-5 page 116 Ross Pro s Sports Equipment + Projected sales... 4,800 units + Desired ending inventory... 480 (10% 4,800) Beginning

More information

LOAN MARKET DATA AND ANALYTICS BY THOMSON REUTERS LPC

LOAN MARKET DATA AND ANALYTICS BY THOMSON REUTERS LPC LOAN MARKET DATA AND ANALYTICS BY THOMSON REUTERS LPC GLOBAL LOAN MARKET DATA AND ANALYTICS BY THOMSON REUTERS LPC Secondary Market Bid Levels: Europe Slide 2 European CLO New Issue Volume Monthly Slide

More information

Acct Fall D: 2015 Spring B Smartbook 5 - B18

Acct Fall D: 2015 Spring B Smartbook 5 - B18 1. value: 2.00 points Exercise 13-2 Accounting for par, stated, and no-par stock issuances LO P1 Rodriguez Corporation issues 18,000 shares of its common stock for $405,000 cash on February 20. 1. Assume

More information

I. Introduction to Bonds

I. Introduction to Bonds University of California, Merced ECO 163-Economics of Investments Chapter 10 Lecture otes I. Introduction to Bonds Professor Jason Lee A. Definitions Definition: A bond obligates the issuer to make specified

More information

4/10/2012. Liabilities and Interest. Learning Objectives (LO) LO 1 Current Liabilities. LO 1 Current Liabilities. LO 1 Current Liabilities

4/10/2012. Liabilities and Interest. Learning Objectives (LO) LO 1 Current Liabilities. LO 1 Current Liabilities. LO 1 Current Liabilities Learning Objectives (LO) Liabilities and Interest CHAPTER 9 After studying this chapter, you should be able to 1. Account for current liabilities 2. Measure and account for long-term liabilities 3. Account

More information

CEBU CPAR CENTER. M a n d a u e C I t y

CEBU CPAR CENTER. M a n d a u e C I t y Page 1 of 11 CEBU CPAR CENTER M a n d a u e C I t y AUDITING PROBLEMS AUDIT OF LIABILITIES PROBLEM NO. 1 In the audit of the Heats Corporation s financial statements at December 31, 2005, the chief accountant

More information

Chapter. Investing in Bonds. 3.1 Evaluating Bonds 3.2 Buying and Selling Bonds South-Western, Cengage Learning

Chapter. Investing in Bonds. 3.1 Evaluating Bonds 3.2 Buying and Selling Bonds South-Western, Cengage Learning Chapter 3 Investing in Bonds 3.1 Evaluating Bonds 3.2 Buying and Selling Bonds Lesson 3.1 Evaluating Bonds Learning Objectives LO 1-1 Describe the characteristics and different types of corporate bonds.

More information

Chapter 11 - REPORTING AND ANALYZING STOCKHOLDERS EQUITY

Chapter 11 - REPORTING AND ANALYZING STOCKHOLDERS EQUITY Revised Summer 2018 Chapter 11 Review 1 Chapter 11 - REPORTING AND ANALYZING STOCKHOLDERS EQUITY LO 1: Describe the major characteristics of a corporation. WHAT IS A CORPORATION Corporation: legal entity,

More information

CPA Australia Plan Your Own Enterprise Competition

CPA Australia Plan Your Own Enterprise Competition Financial Plan Your financial plan should include: 1. A list of Start-Up Costs and how these will be paid for (eg from savings, bank loan or family loan) 2. A Breakeven Analysis, which includes: a list

More information