Reference no: EM133067835

Question - Complicated Company is selling audio and video appliances. The company's fiscal year ends on March 31. The following information relates to the obligation of the company as of March 31, 2021.

Notes Payable - Complicated Company has signed several long-term notes with financial institutions. The maturities of these notes are given below. The total unpaid interest for all of these notes amounts to P408,000 on March 31, 2021.

Due Date Amount

April 31, 2021 720,000

July 31, 2021 1,080,000

September 1, 2021 540,000

February 1, 2022 540,000

April 1, 2022 - March 31, 2023 3,240,000

Estimated Warranties

Complicated Company has a one year product warranty on some selected items. The estimated warranty liability on sales made during the 2019 - 2020 fiscal year and still outstanding as of March 31, 2020 amounted to P302,400. The warranty costs on sales made from April 1, 2020 to March 31, 2021, are estimated at P756,000. The actual warranty cost incurred during 2020 - 2021 fiscal year are as follows:

Warranty claims honored on 2019 - 2020 sales 302,400

Warranty claims honored on 2020 - 2021 sales 342,000

Trade Payables

Accounts payable for supplies, goods, and services purchases on open account amount to 672,000 as of March 31, 2021.

Dividends

On March 10, 2021, Complicated's board of directors declared a cash dividend of P0.30 per ordinary share and 10% ordinary share dividend. Both dividends were to be distributed on April 5, 2021 to ordinary stockholders on record at the close of business on March 31, 2021. As of March 31, 2021, Complicated has 6,000,000, P2 par value, ordinary shares issued and outstanding.

Bonds Payable

Complicated Company issued P6,000,000, 12% bonds, on October 1, 2011 at 96. The bonds will mature on October 1, 2025.

Interest is paid semi-annually on October 1 and April 1. Complicated uses the straight line method to amortize bond discount.

Based on the foregoing information, determine the balances of the following as of March 31, 2021:

1. How much is the estimated warranty payable?

a. 414,000 c. 302,400

b. 756,000 d. 1,058,400

2. How much is the unamortized bond discount?

a. 132,000 c. 240,000

b. 108,000 d. 120,000

3. How much is the bond interest payable?

a. 360,000 c. 180,000

b. 300,000 d. 0

4.How much is the total current liabilities?

a. 7,734,000 c. 6,534,000

b. 6,126,000 d. 4,734,000

5. How much is the total non-current liabilities?

a. 9,240,000 c. 9,108,000

b. 9,132,000 d. 9,000,000