Question

Concord Corporation is preparing its December 31, 2020, balance sheet. The following items may be reported as either a current or long-term liability.

1.		On December 15, 2020, Concord declared a cash dividend of $4.20 per share to stockholders of record on December 31. The dividend is payable on January 15, 2021. Concord has issued 1,000,000 shares of common stock, of which 50,000 shares are held in treasury.
2.		At December 31, bonds payable of $119,412,000 are outstanding. The bonds pay 12% interest every September 30 and mature in installments of $29,853,000 every September 30, beginning September 30, 2021.
3.		At December 31, 2019, customer advances were $12,908,000. During 2020, Concord collected $32,759,000 of customer advances; advances of $25,816,000 should be recognized in income.

For each item above, indicate the dollar amounts to be reported as a current liability and as a long-term liability, if any.

						Reported as
1.		Dividends payable		$enter a dollar amount		select a liability type                                                          Current LiabilityLong-term Liability
2.		Bonds payable (September 30, 2021 installment)		$enter a dollar amount		select a liability type                                                          Current LiabilityLong-term Liability
		Bonds payable (Other than September 30, 2021 installment)		$enter a dollar amount		select a liability type                                                          Current LiabilityLong-term Liability
		Interest payable		$enter a dollar amount		select a liability type                                                          Current LiabilityLong-term Liability
3.		Customer advances		$enter a dollar amount		select a liability type                                                          Current LiabilityLong-term Liability

please show work and explain

Answer 1

.

Amounts are in $

Particulars	Amount	Reported as
Dividends payable	$3,990,000	Current Liability
Bonds payable (Sept 30 instalment)	$29,853,000	Current Liability
Bonds payable (other than above)	$89,559,000	Long term Liability
Interest payable	$3,582,360	Current Liability
Customer advances	$19,851,000	Current Liability

Workings :

Dividend payable = (1,000,000 - 50,000) x 4.2 = 3,990,000

Bonds payable (long term) = $119,412,000 - $29,853,000 = 89,559,000

Interest (at year end) = $119,412,000 x 12% x 3/12 = 3,582,360

Customer advances = $12,908,000+ $32,759,000 - $25,816,000 = 19,851,000

IF ANY DOUBTS PLEASE MENTION IN COMMNET

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