Reference no: EM133010707
Entity A is a local construction company which is listed in Hong Kong. It provides various construction services to different types of customers. Entity A borrowed several long-term debts to maintain its company development and stability.
- On 1 January 2020, Entity A contracted with Entity B to construct a residential building for $35,000,000 on a piece of land that Entity A had already purchased years earlier.
- The construction was started on 1 January 2020. Entity A was to make five payments in 2020, with the last payment scheduled for the date of completion. The building was completed on 31 December 2020.
Entity A made the following payments during 2020:
1 January 2020 $5,500,000
1 April 2020 $1,600,000
31 July 2020 $11,890,000
1 October 2020 $9,500,000
30 November 2020 $6,510,000
Entity A had the following debt outstanding on 31 December 2020:
- 5.00%, 2-year long-term debt of $9,600,000 which was borrowed on 1 July 2019. It is specifically borrowed for the construction of the residential building project on 1 January 2020. The fund is re-invested and earns interest at a rate of 3.60% per annum. The interest earned is deposited to Entity A one month after the end of the reporting period, i.e. 31 January.
- 7.50%, 12-year long-term debt of $12,500,000 which was borrowed on 31 March 2016.
- 10.50%, 8-year long-term debt of $34,500,000 which was borrowed on 1 September 2018.Except the funds specifically borrowed from the 2-year long-term debt, the other funds are all deposited in the company bank account. This company bank account is a simple saving account without any interest revenue.
The end of the reporting period is 31 December.
The annual interest payable to various lenders is always settled by direct bank transfer 2 weeks after the end of the reporting period, i.e. 15 January.
REQUIRED:
Problem 1: According to relevant accounting standards, measure the amount of the items below on 31 December 2020.
Prepare journal entries to record the transactions of entity
: Prepare journal entries to record the transactions of Entity A on 1 May 2020, 30 June 2020, 15 October 2020, 15 November 2020, 1 December 2020
|
What is the Black and Scholes value of this option
: A stock trades for $45 per share. A call option on that stock has a strike price of $50. What is the Black and Scholes value of this option
|
Measure the carrying amount of the development cost of plan
: Measure the carrying amount of the development cost of Plan X on 30 June 2020. Entity A is an information technology company listed in Hong Kong.
|
Prepare a tabular analysis of the april transactions
: Prepare a tabular analysis of the April transactions. Quintin Smith opened a veterinary business on March. On March 31, the balance sheet showed Cash
|
Make measure the amount of the items on december
: Entity A is a local construction company. According to relevant accounting standards, measure the amount of the items below on 31 December 2020.
|
Make a measure the amount that will be charged to statement
: Measure the amount that will be charged to Statement of Profit or Loss for the year ended 30 September 2021 in respect of research and development costs.
|
Prepare journal entries to record the transactions
: Issue of ordinary share capital 20,000 shares, 50 per share. Reissue of treasury share 3,020 shares 40 per share. Prepare journal entries to record transactions
|
What possible steps forward can be taken
: Do you think she will find that the company is insolvent and if so, at what stage do this occur? What possible steps forward can be taken
|
Contrast the shareholder theory and the stakeholder theory
: Contrast the shareholder theory and the stakeholder theory. Discuss which theory you agree with more and why. Give examples to support your discussion.
|