Đề BT Nhóm môn Kế toán và Báo cáo kế toán quốc tế 2

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Ex. 13-152—Provisions
The following situations relate to Washbum Company.
1. Washburn provides a warranty with all its products it sells. It estimates that it will sell
1,200,000 units of its product for the year ended December 31, 2022, and that its total
revenue for the product will be €100,000,000. It also estimates that 60% of the product will
have no defects, 30% will have major defects, and 10% will have minor defects The cost of
a minor defect is estimated to be $5 for each product repaired, and the cost for a major
defect cost is €15. The company also estimates that the minimum amount of warranty
expense will be €2,500,000 and the maximum will be €12,000,000.
2. Washburn is involved in a tax dispute with the tax authorities. The most likely outcome of
this dispute is that Washburn will lose and have to pay €500,000. The minimum it will lose
is €25,000 and the maximum is €3,000,000.
3. Washbum has a policy of refunding purchases to dissatisfied customers, even though it is
under no obligation to do so. However, it has created a valid expectation with its customers
to continue this practice. These refunds can range from 5% of sales to 9% of sales, with any
amount in between a reasonable possibility. In 2022, Washburn has €50,000,000 of sales
subject to possible refund.

Instructions
Prepare the journal entry to record provisions, if any, for Washburn at December 31, 2022.

Pr. 14-131—Comprehensive bond problem.

Titania Co. sells €600,000 of 12% bonds on June 1, 2021. The bonds pay interest on December 1
and June 1. The due date of the bonds is June 1, 2026. The bonds yield 10%, selling for
€638,780 On October 1, 2022, Titania buys back €300,000 worth of bonds for €315,000
(includes accrued interest).

Instructions
(Round to the nearest dollar.)

Prepare all relevant entries through October 1, 2022. Amortize premium or discount on interest
dates and at year-end. (Assume that reversing entries were made.
Ex. 21-113—Lessor accounting—sales-type lease

Hayes Corp, is a manufacturer of truck trailers On January 1, 2022, Hayes Corp, leases ten
trailers to Lester Company under a six-year noncancelable lease agreement. The following
information about the lease and the trailers is provided:

1. Equal annual payments that are due on January 1 each year provide Hayes Corp, with an 8%
return on net investment (present value factor for 6 periods at 8% is 4.99271).

2. Titles to the trailers pass to Lester at the end of the lease.

3. The fair value of each trailer is €60,000. The cost of each trailer to Hayes Corp is €54,000.
Each trailer has an expected useful life of nine years

4. Collectibility of the lease payments is probable.

Instructions
(a) What type of lease is this for the lessor? Discuss.
(b) Calculate the annual lease payment. (Round to nearest dollar.)
(c) Prepare a lease amortization schedule for Hayes Corp, for the first three years
(d) Prepare the journal entries for the lessor for 2022 to record the lease agreement, the receipt
of the lease rentals, and the recognition of revenue (assume the use of a perpetual inventory
method and round all amounts to the nearest dollar).

Pr. 21-116—Lessee accounting—finance lease.

Eubank Company, as lessee, enters into a lease agreement on July 1. 2022, for equipment. The
following data are relevant to the lease agreement:
1. The term of the noncancelable lease is 4 years Payments of €978,446 are due on July 1 of
each year, beginning on July 1,2022
2. The fair value of the equipment on July 1, 2022 is €3,500,000 The equipment has an
economic life of 6 years with no salvage value.
3. Eubank depreciates similar machinery it owns on the sum-of-the-years’-digits basis
4. The lessee pays all executory costs.
5 Eubank's incremental borrowing rate is 10% per year. The lessee is aware that the lessor used
an implicit rate of 8% in computing the lease payments (present value factor of an ordinary
annuity for 4 periods at 8%, 3.57710; at 10%, 3.48685).

Instructions
(a) Indicate the type of lease Eubank Company has entered into and what accounting treatment
is applicable.
(b) Prepare the journal entries on Eubank’s books that relate to the lease agreement for the
following dates: (Round all amounts to the nearest dollar. Include a partial amortization
schedule.)
 1. July 1,2022.
2. December 31,2022.
3. July 1,2023.
4. December 31, 2023.

Ex. 19-123—Permanent and temporary differences.

Listed below are items that are treated differently for accounting purposes than they are for tax
purposes. Indicate whether the items are permanent differences or temporary differences. For
temporary differences, indicate whether they will create deferred tax assets or deferred tax
liabilities
1. Investments accounted for under the equity method.
2. Advance rental receipts
3. Fine for polluting.
4. Estimated future warranty costs.
5. Excess of contributions over pension expense.
6. Expenses incurred in obtaining tax-exempt income.
7. Litigation accruals.
8. Excess tax depreciation over accounting depreciation.
9. Long-term construction contracts.
10. Percentage depletion of natural resources in excess of their cost.

Instruction: Provide solution and explain your choices in English.

Ex. 15-154—Treasury shares

Ellison Company's statement of financial position shows:
Share capital—ordinary, €20 par €3,000,000
Share premium—ordinary 1,050,000
750,000
Retained earnings
Instructions
Record the following transactions by the cost method.
(a) Bought 5,000 ordinary shares at €29 a share.
(b) Sold 2,500 treasury shares at €30 a share.
(c) Sold 1,000 shares of treasury shares at €26 a share
Ex. 15-156—Equity transactions.
Indicate the effect of each of the following transactions on total equity by placing an “X" in the
appropriate column.
Increase Decrease No Effect

1. Treasury shares are resold at more than cost. __________ ____________ ___________

2. Operating loss for the period. ________ ____________ ___________

3. Share split. ________ ____________ ___________

4. Declaration of a share dividend. ________ ____________ ___________

5. Acquisition of machinery for ordinary shares. _________ ____________ ___________

6. Conversion of bonds payable into ordinary

shares ________ ____________ ___________

7. Not declaring a dividend on cumulative

preference shares. ________ ____________ ___________

8. Declaration of cash dividend.

9. Payment of cash dividend. ________ ____________ ___________

Instruction: Provide solution and explain your choices in English.

Ex. 16-146—Convertible Bonds.

Koch Co. sold convertible bonds at a premium. Interest is paid on May 31 and November 30. On
May 31, after interest was paid. 100, €1,000 bonds are tendered for conversion into 3,000 shares
of €10 par value ordinary shares that had a market price of €40 per share. How should Koch Co.
account for the conversion of the bonds into ordinary shares under the book value method?
Discuss the rationale for this method.

Ex. 17-129—Debt Investments.

On January 1, 2021, Ellison Company purchased 12% bonds, having a maturity value of
€800,000, for €860,652. The bonds provide the bondholders with a 10% yield. They are dated
January 1, 2021, and mature January 1, 2026, with interest receivable December 31 of each year
Ellison’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 through 2022
(c) Prepare the journal entry to record the interest received and the amortization for 2021.
(d) Prepare any entries necessary at December 31, 2021, using the fair value option, assuming
the fair value of the bonds is €860,000.
(e) Prepare any entries necessary at December 31, 2022, using the fair value option, assuming
the fair value of the bonds is €840,000.

Pr, 23-154—Statement of cash flows (direct and indirect methods).

Hartman. Inc has prepared the following comparative statement of financial position for 2021
and 2022:
2022 2021
Plant assets €1,260,000 €1.050,000
Accumulated depreciation (450,000) (375,000)
Patent 153.000 174,000
Prepaid expenses 18,000 27,000
Inventory 150,000 180,000
Receivables 159.000 117,000
Cash 297,000 153,000
€1,587,000 €1,326,000
Share capital-preference € 129,000 € 66,000
Share premium-preference 510.000 -
Share capital-ordinary 168 000 168,000
Retained earnings 60.000 42,000
Mortgage payable - 450,000
Accounts payable 120,000 —
Accrued liabilities 600,000 600,000
€1.587.000 €1,325.000

1 The Accumulated Depreciation account has been credited only for the depreciation
expense for the period
2 The Retained Earnings account has been charged for dividends of €183,000 and credited
for the net income for the year

The income statement for 2022 is as follows:

Sales €1,980,000
Cost of sales 1,089,000
Gross profit 891,000
Operating expenses 690,000
Net income € 201,000
 Instructions
(a) From the information above, prepare a statement of cash flows (indirect method) for
Hartman, Inc. for the year ended December 31, 2022.

(a) Hartman, Inc.

Statement of Cash Flows
For the Year Ended December 31,2022
Increase (Decrease) in Cash

Cash flows from operating activities

Net income 201,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense 75,000 (450,000 – 375,000)
Patent amortization 21,000 (174,000 – 153,000)
Increase in receivables -42,000 (159,000 -117,000) khoản pthu tăng -> chưa lấy đc nợ,
thiếu tiền nên ghi âm
Decrease in inventory 30,000 (180,000 -150,000)
Decrease in prepaid expenses 9,000 (27,000 – 18,000)

Increase in accounts payable ??? k biết nữa theo ngta thì là -15,000

Net cash provided by operating activities (cộng tổng khoản ở trên nma k biết khoản
payable) nếu payable là -1500 thì thì này bằng 297,000

Cash used in investing activities

Purchase of plant assets -210,000

Cash flows from financing activities

Payment of cash dividend -138,000

Retirement of mortgage payable -450,000

Sale of preference shares 645,000

Net cash provided by financing activities 57,000

Net increase in cash 144,000

Cash, January 1, 2022 153,000
Cash, December 31, 2022 297,000

Pr. 24-113—Interim reporting

Interim financial reporting has become an important topic in accounting There has been
considerable discussion as to the proper method of reflecting results of operations at interim
dates.

Instructions
(a) Discuss generally how revenue should be recognized at interim dates and specifically how
revenue should be recognized for industries subject to large seasonal fluctuations in
revenue and for long-term contracts using the percentage-of-completion method at annual
reporting dates
Revenue should be recognized at interim dates based on the principle of revenue
recognition. For industries with large seasonal fluctuations, revenue should be recognized
in proportion to the work completed. For long-term contracts using the percentage-of-
completion method, revenue should be recognized based on the percentage of the contract
completed at the interim date.
(b) Discuss generally how product and period costs should be recognized at interim dates Also
discuss how inventory and cost of goods sold may be afforded special accounting
treatment at interim dates.

Product costs (direct materials, direct labor) should be recognized when goods are produced, and period
costs (indirect costs like rent, utilities) should be recognized in the period they are incurred. Inventory
should be valued at lower of cost or market, and cost of goods sold should reflect the cost of goods sold
during the period.

Inventory and cost of goods sold may be given special treatment at interim dates by using estimates for
inventory valuation or cost of goods sold. This can help in providing a more accurate representation of
financial position and performance during the interim period.

(c) Discuss how the provision for income taxes is computed and reflected in interim financial
statements.

The provision for income taxes in interim financial statements is computed by estimating
the effective tax rate for the full year and applying it to the income for the interim period.
This ensures that taxes are appropriately accrued based on the expected annual tax
liability.