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AP 5902 Liability Supporting Notes Uploaded by Meojh Imissu
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AUDITING THEORY
1
of 6
AP - Liabilities (2)
AP-5903_PPE & Intangibles.-
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PROBLEM NO. 6 - Suns, Inc.
Question No. 1 - B Total proceeds Less liability component: Present value of the principal (P2,000,000 x 0.6830) Present value of the interest [(P2,000,000 x 8% x 3.1699) Equity component
Int. exp. J an. 1, 2004 Dec. 31. 2004 Dec. 31. 2005 Dec. 31. 2006 Dec. 31. 2007
187,318 190,050 193,055 196,361
Int. exp.
Int. paid 160,000 160,000 160,000 160,000
Int. paid
2,000 1,366,000 507,184
Amort. 27,318 30,050 33,055 36,361 126,785 Amort.
J an. 1, 2004 Dec. 31. 2004 Dec. 31. 2005
187,318 190,050
160,000 160,000
27,318 30,050
Dec. 31. 2006 Dec. 31. 2007
48,264 49,090
40,000 40,000
8,264 9,090 74,723
Question no. 2 - D Carrying value, 1/1/04 (see no. 1) Add discount amortization for 2004: Effective interest (P1,873,184 x 10%) You're Reading a Preview Nominal interest (P2,000,000 x 8%) Carrying value, 12/31/04 Unlock full access with a free trial.
1,873,18 126
CV 1,873,184 1,900,502 1,930,553 1,963,608 1,999,969
CV 1,873,184 1,900,502 1,930,553 965,276 482,638 490,902 499,992
1,873 187,318 160,000
Question no. 3 - D Download With Free Trial Effective interest (P1,900,502 x 10%)
190,050
Question no. 4 - A Bonds Payable Discount on bonds payable (P1,000,000 - P965,276) Common stock APIC
34,724 600,000 365,276
27,31 1,900
1,000,000
Carrying value of bonds converted (P1,930,553* x 1/2) Par value of common stock received (P1,000,000/P1,000 x 10 x P100) Amount to be credited to APIC value, 12/31/04 (see no. 2) MasterCarrying your semester with Scribd Add discount amortization for 2005: Effective interest (P1,900,502 x 10%) & The New York Times interest (P2,000,000 x 8%) Special offer for Nominal students: Only $4.99/month. Carrying value, 12/31/05
965 600 365 1,900
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30,05 1,930
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