This document provides an overview of accounting for non-current liabilities such as bonds payable, long-term notes payable, and related topics. It describes the key learning objectives for the chapter, including how to account for the issuance of long-term debt instruments and their subsequent valuation and treatment of discounts, premiums, and interest expense over time. Examples and illustrations are provided for bonds and notes issued at par value, a discount, and a premium. The accounting treatment of extinguishing non-current liabilities and off-balance sheet financing arrangements is also discussed.
Chapter 14:
Describe the nature of bonds and indicate the accounting for bond issuances.
Explain the accounting for long-term notes payable.
Explain the accounting for the extinguishment of non-current liabilities.
Indicate how to present and analyze non-current liabilities.
Non-current liabilities (long-term debt) consist of an expected outflow of resources arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer.
Chapter 14:
Describe the nature of bonds and indicate the accounting for bond issuances.
Explain the accounting for long-term notes payable.
Explain the accounting for the extinguishment of non-current liabilities.
Indicate how to present and analyze non-current liabilities.
Non-current liabilities (long-term debt) consist of an expected outflow of resources arising from present obligations that are not payable within a year or the operating cycle of the company, whichever is longer.
444ChapterLiabilitiesAfter studying this chapter, yo.docxgilbertkpeters11344
444
Chapter
Liabilities
After studying this chapter, you should be
able to:
1 Explain a current liability, and identify
the major types of current liabilities.
2 Describe the accounting for notes
payable.
3 Explain the accounting for other current
liabilities.
4 Explain why bonds are issued, and
identify the types of bonds.
5 Prepare the entries for the issuance of
bonds and interest expense.
6 Describe the entries when bonds are
redeemed or converted.
7 Describe the accounting for long-term
notes payable.
8 Identify the methods for the presentation
and analysis of long-term liabilities.
S T U D Y O B J E C T I V E S
Feature Story
The Navigator✓
10
FINANCING HIS DREAMS
What would you do if you had a great idea for a new product, but couldn’t
come up with the cash to get the business off the ground? Small businesses
often cannot attract investors. Nor can they obtain traditional debt financing
through bank loans or bond issuances. Instead, they often resort to unusual,
and costly, forms of nontraditional financing.
Such was the case for Wilbert Murdock. Murdock grew up in a New York
housing project, and always had great ambitions. This ambitious spirit led him
into some business ventures that failed: a medical diagnostic tool, a device to
eliminate carpal-tunnel syndrome, custom-designed sneakers, and a device to
keep people from falling asleep while driving.
Scan Study Objectives ■
Read Feature Story ■
Read Preview ■
Read text and answer
p. 453 ■ p. 458 ■ p. 461 ■ p. 463 ■
p. 465 ■
Work Comprehensive p. 469 ■
Review Summary of Study Objectives ■
Answer Self-Study Questions ■
Complete Assignments ■
The Navigator✓
Do it!
Do it!
JWCL165_c10_444-505.qxd 8/12/09 7:24 AM Page 444
445
Another idea was computer-
ized golf clubs that analyze a
golfer’s swing and provide
immediate feedback. Murdock
saw great potential in the
idea: Many golfers are willing
to shell out considerable sums
of money for devices that
might improve their game.
But Murdock had no cash to
develop his product, and
banks and other lenders had
shied away. Rather than give
up, Murdock resorted to credit cards—in a big way. He quickly owed $25,000
to credit card companies.
While funding a business with credit cards might sound unusual, it isn’t. A
recent study found that one-third of businesses with fewer than 20 employ-
ees financed at least part of their operations with credit cards. As Murdock
explained, credit cards are an appealing way to finance a start-up because
“credit-card companies don’t care how the money is spent.” However, they
do care how they are paid. And so Murdock faced high interest charges and
a barrage of credit card collection letters.
Murdock’s debt forced him to sacrifice nearly everything in order to keep
his business afloat. His car stopped running, he barely had enough money
to buy food, and he lived and worked out of a dimly lit apartment in his
mother’s basement. Through it all he tried to maintain a po.
Overview, Objectives and Readings Page 1 of 1OverviewT.docxgerardkortney
Overview, Objectives and Readings Page 1 of 1
Overview
This week we will further explore working capital management by focusing on various sources of short-term financing. These
sources can include trade credit, bank loans, commercial paper, the use of accounts receivable and inventory as collateral
and hedging interest rate risk.
Practice Problems: Please see the syllabus for assigned homework/practice problems.
Objectives Readings
_ _ _ __ .._
Learning objectives: Week 5 lecture materials
1. Trade credit from suppliers is normally the most Project instructions
available form of short-term financing.
2. Bank loans are usually short-term in nature and should Chapter 8
be paid off from funds from the normal operations of the
firm.
3. Commercial paper represents ashort-term, unsecured
promissory note issued by the firm.
4. By using accounts receivable and inventory as collateral
for a loan, the firm may be able to borrow larger
amounts.
5. Hedging may be used to offset the risk of interest rates
rising.
O Walsh College, Al! rights reserved
https://ool-content.walshcollege.edu/CourseFiles/FIN/FIN315/jesdale/Week05/OOR/Obj... 10/30/2017
Page 1 of 3
Financing Working Capital
Content Author: Louise August, CPA, PhD
i n the lectures on Working Capital (WC) we talked about the dollar amounts tied up in assets like Accounts Receivable (AR)
and Inventory. Because these accounts often represent substantial balances, we may need to think about how the firm can
finance its investment in WC Assets.
The first concept to consider is "Maturity Matching." That means that short-term needs should be financed with short-term
debt and vice-versa. You wouldn't finance a building with a 90-day note. So if we're thinking about how to finance the
investment in short-term assets like Receivables and Inventory short-term financing is probably the way to go.
~7~t~,tt'I~~/ ~c3~C~'tlt'1 :
Supplying the investment in WC assts with ST sources of Financing
Accounts r~e~eiva~le ~ Accruals
Inver►tory Accounts payable
5T bank loans
There are a number of sources of short-term capital available to the firm and we'll look at each of these in turn:
1. Accruals
2. Accounts Payable
3. Commercial Paper (not available to all firms, so not listed in the graphic above)
4. Short-Term Bank Loans
Accruals
This balance sheet line item usually represents unpaid wages and taxes. These
accounts represent the time periods between when a benefit is received and the
payment for it is made. An example is payroll (Accrued Wages): an employee works
today but the wages earned aren't paid until payday. Accrual accounting requires that
the firm recognize the benefit it received from the employee's efforts and the obligation it
has to pay the wages. Similarly with taxes, the firm earns a portion of its profits
throughout the year but only makes tax payments each quarter.
Not financing in the classic sense, but these accounts do represent a period of time during which payment i.
CASE STUDY COMMENTARY• Individual written task in Harvard sty.docxmoggdede
CASE STUDY COMMENTARY
• Individual written task in Harvard style format, cover page, table of contents, blocked text and reference list.
• The student must build a coherent discussion or argument in essay format, analyzing theories and models. Ethical theories, legal cases and case studies may be referred to when providing examples. Cite all sources.
• Students must write in complete sentences and develop paragraphs. No bullet points are allowed. Provide spacing between the sentences.
• Prepare and Introduction, Body, and Conclusion paragraphs.
• Sources must be used, identified, and properly cited.
• Format: PDF submitted through Turnitin
• The answers should analyse the following based on the case study provided with this task below the Rubrics:
1. Identify and explain the relevant parties in this case study?
2. Identify and explain in order the ethical issues related to each party involved in this case study? Cite your sources.
3. What ethical theories can each party use to support their behavior or decisions? Cite your sources.
4. Identify and discuss the points of law raised in the case? Cite your sources.
5. Identify and explain an additional case that supports or differentiates this case/situation.
Case study:
Cyber Harassment
In many ways, social media platforms have created great benefits for our societies by expanding and diversifying the ways people communicate with each other, and yet these platforms also have the power to cause harm. Posting hurtful messages about other people is a form of harassment known as cyberbullying. Some acts of cyberbullying may not only be considered slanderous, but also lead to serious consequences. In 2010, Rutgers University student Tyler Clementi jumped to his death a few days after his roommate used a webcam to observe and tweet about Tyler’s sexual encounter with another man. Jane Clementi, Tyler’s mother, stated, “In this digital world, we need to teach our youngsters that their actions have consequences, that their words have real power to hurt or to help. They must be encouraged to choose to build people up and not tear them down.”
In 2013, Idalia Hernández Ramos, a middle school teacher in Mexico, was a victim of cyber harassment. After discovering that one of her students tweeted that the teacher was a “bitch” and a “whore,” Hernández confronted the girl during a lesson on social media etiquette. Inquiring why the girl would post such hurtful messages that could harm the teacher’s reputation, the student meekly replied that she was upset at the time. The teacher responded that she was very upset by the student’s actions. Demanding a public apology in front of the class, Hernández stated that she would not allow “young brats” to call her those names. Hernández uploaded a video of this confrontation online, attracting much attention.
While Hernández was subject to cyber harassment, some felt she went too far by confronting the student in the classroom.
Case Study Chapter 5 100 wordsTranscultural Nursing in the.docxmoggdede
Case Study Chapter 5
100 words
Transcultural Nursing in the Community Community health clients belong to a variety of cultural groups. To gain acceptance, nurses must strive to introduce improved health practices that are presented in a manner consistent with clients’ cultural values. The student nurse is going to visit two different homes with the community health nurse with different cultural beliefs. 1. In preparation for the student nurse’s visits to two different homes, what five transcultural principles will assist in guiding community health nursing practice in these settings? 2. During the first visit, the student nurse has to conduct a cultural assessment by questioning the patient and observing the family dynamics. The community health nurse has requested that the student nurse assess for appropriate information in six major areas. What six major areas should the student nurse consider? 3. After the conclusion of the first visit, the community health nurse cautions the student nurse to be consciously aware of any ethnocentrism attitudes toward other cultures and the importance of cultural diversity. What is ethnocentrism and why is it so important to be conscious of cultural diversity?
.
More Related Content
Similar to 14-‹#›PREVIEW OF CHAPTERIntermediate AccountingIFRS .docx
444ChapterLiabilitiesAfter studying this chapter, yo.docxgilbertkpeters11344
444
Chapter
Liabilities
After studying this chapter, you should be
able to:
1 Explain a current liability, and identify
the major types of current liabilities.
2 Describe the accounting for notes
payable.
3 Explain the accounting for other current
liabilities.
4 Explain why bonds are issued, and
identify the types of bonds.
5 Prepare the entries for the issuance of
bonds and interest expense.
6 Describe the entries when bonds are
redeemed or converted.
7 Describe the accounting for long-term
notes payable.
8 Identify the methods for the presentation
and analysis of long-term liabilities.
S T U D Y O B J E C T I V E S
Feature Story
The Navigator✓
10
FINANCING HIS DREAMS
What would you do if you had a great idea for a new product, but couldn’t
come up with the cash to get the business off the ground? Small businesses
often cannot attract investors. Nor can they obtain traditional debt financing
through bank loans or bond issuances. Instead, they often resort to unusual,
and costly, forms of nontraditional financing.
Such was the case for Wilbert Murdock. Murdock grew up in a New York
housing project, and always had great ambitions. This ambitious spirit led him
into some business ventures that failed: a medical diagnostic tool, a device to
eliminate carpal-tunnel syndrome, custom-designed sneakers, and a device to
keep people from falling asleep while driving.
Scan Study Objectives ■
Read Feature Story ■
Read Preview ■
Read text and answer
p. 453 ■ p. 458 ■ p. 461 ■ p. 463 ■
p. 465 ■
Work Comprehensive p. 469 ■
Review Summary of Study Objectives ■
Answer Self-Study Questions ■
Complete Assignments ■
The Navigator✓
Do it!
Do it!
JWCL165_c10_444-505.qxd 8/12/09 7:24 AM Page 444
445
Another idea was computer-
ized golf clubs that analyze a
golfer’s swing and provide
immediate feedback. Murdock
saw great potential in the
idea: Many golfers are willing
to shell out considerable sums
of money for devices that
might improve their game.
But Murdock had no cash to
develop his product, and
banks and other lenders had
shied away. Rather than give
up, Murdock resorted to credit cards—in a big way. He quickly owed $25,000
to credit card companies.
While funding a business with credit cards might sound unusual, it isn’t. A
recent study found that one-third of businesses with fewer than 20 employ-
ees financed at least part of their operations with credit cards. As Murdock
explained, credit cards are an appealing way to finance a start-up because
“credit-card companies don’t care how the money is spent.” However, they
do care how they are paid. And so Murdock faced high interest charges and
a barrage of credit card collection letters.
Murdock’s debt forced him to sacrifice nearly everything in order to keep
his business afloat. His car stopped running, he barely had enough money
to buy food, and he lived and worked out of a dimly lit apartment in his
mother’s basement. Through it all he tried to maintain a po.
Overview, Objectives and Readings Page 1 of 1OverviewT.docxgerardkortney
Overview, Objectives and Readings Page 1 of 1
Overview
This week we will further explore working capital management by focusing on various sources of short-term financing. These
sources can include trade credit, bank loans, commercial paper, the use of accounts receivable and inventory as collateral
and hedging interest rate risk.
Practice Problems: Please see the syllabus for assigned homework/practice problems.
Objectives Readings
_ _ _ __ .._
Learning objectives: Week 5 lecture materials
1. Trade credit from suppliers is normally the most Project instructions
available form of short-term financing.
2. Bank loans are usually short-term in nature and should Chapter 8
be paid off from funds from the normal operations of the
firm.
3. Commercial paper represents ashort-term, unsecured
promissory note issued by the firm.
4. By using accounts receivable and inventory as collateral
for a loan, the firm may be able to borrow larger
amounts.
5. Hedging may be used to offset the risk of interest rates
rising.
O Walsh College, Al! rights reserved
https://ool-content.walshcollege.edu/CourseFiles/FIN/FIN315/jesdale/Week05/OOR/Obj... 10/30/2017
Page 1 of 3
Financing Working Capital
Content Author: Louise August, CPA, PhD
i n the lectures on Working Capital (WC) we talked about the dollar amounts tied up in assets like Accounts Receivable (AR)
and Inventory. Because these accounts often represent substantial balances, we may need to think about how the firm can
finance its investment in WC Assets.
The first concept to consider is "Maturity Matching." That means that short-term needs should be financed with short-term
debt and vice-versa. You wouldn't finance a building with a 90-day note. So if we're thinking about how to finance the
investment in short-term assets like Receivables and Inventory short-term financing is probably the way to go.
~7~t~,tt'I~~/ ~c3~C~'tlt'1 :
Supplying the investment in WC assts with ST sources of Financing
Accounts r~e~eiva~le ~ Accruals
Inver►tory Accounts payable
5T bank loans
There are a number of sources of short-term capital available to the firm and we'll look at each of these in turn:
1. Accruals
2. Accounts Payable
3. Commercial Paper (not available to all firms, so not listed in the graphic above)
4. Short-Term Bank Loans
Accruals
This balance sheet line item usually represents unpaid wages and taxes. These
accounts represent the time periods between when a benefit is received and the
payment for it is made. An example is payroll (Accrued Wages): an employee works
today but the wages earned aren't paid until payday. Accrual accounting requires that
the firm recognize the benefit it received from the employee's efforts and the obligation it
has to pay the wages. Similarly with taxes, the firm earns a portion of its profits
throughout the year but only makes tax payments each quarter.
Not financing in the classic sense, but these accounts do represent a period of time during which payment i.
CASE STUDY COMMENTARY• Individual written task in Harvard sty.docxmoggdede
CASE STUDY COMMENTARY
• Individual written task in Harvard style format, cover page, table of contents, blocked text and reference list.
• The student must build a coherent discussion or argument in essay format, analyzing theories and models. Ethical theories, legal cases and case studies may be referred to when providing examples. Cite all sources.
• Students must write in complete sentences and develop paragraphs. No bullet points are allowed. Provide spacing between the sentences.
• Prepare and Introduction, Body, and Conclusion paragraphs.
• Sources must be used, identified, and properly cited.
• Format: PDF submitted through Turnitin
• The answers should analyse the following based on the case study provided with this task below the Rubrics:
1. Identify and explain the relevant parties in this case study?
2. Identify and explain in order the ethical issues related to each party involved in this case study? Cite your sources.
3. What ethical theories can each party use to support their behavior or decisions? Cite your sources.
4. Identify and discuss the points of law raised in the case? Cite your sources.
5. Identify and explain an additional case that supports or differentiates this case/situation.
Case study:
Cyber Harassment
In many ways, social media platforms have created great benefits for our societies by expanding and diversifying the ways people communicate with each other, and yet these platforms also have the power to cause harm. Posting hurtful messages about other people is a form of harassment known as cyberbullying. Some acts of cyberbullying may not only be considered slanderous, but also lead to serious consequences. In 2010, Rutgers University student Tyler Clementi jumped to his death a few days after his roommate used a webcam to observe and tweet about Tyler’s sexual encounter with another man. Jane Clementi, Tyler’s mother, stated, “In this digital world, we need to teach our youngsters that their actions have consequences, that their words have real power to hurt or to help. They must be encouraged to choose to build people up and not tear them down.”
In 2013, Idalia Hernández Ramos, a middle school teacher in Mexico, was a victim of cyber harassment. After discovering that one of her students tweeted that the teacher was a “bitch” and a “whore,” Hernández confronted the girl during a lesson on social media etiquette. Inquiring why the girl would post such hurtful messages that could harm the teacher’s reputation, the student meekly replied that she was upset at the time. The teacher responded that she was very upset by the student’s actions. Demanding a public apology in front of the class, Hernández stated that she would not allow “young brats” to call her those names. Hernández uploaded a video of this confrontation online, attracting much attention.
While Hernández was subject to cyber harassment, some felt she went too far by confronting the student in the classroom.
Case Study Chapter 5 100 wordsTranscultural Nursing in the.docxmoggdede
Case Study Chapter 5
100 words
Transcultural Nursing in the Community Community health clients belong to a variety of cultural groups. To gain acceptance, nurses must strive to introduce improved health practices that are presented in a manner consistent with clients’ cultural values. The student nurse is going to visit two different homes with the community health nurse with different cultural beliefs. 1. In preparation for the student nurse’s visits to two different homes, what five transcultural principles will assist in guiding community health nursing practice in these settings? 2. During the first visit, the student nurse has to conduct a cultural assessment by questioning the patient and observing the family dynamics. The community health nurse has requested that the student nurse assess for appropriate information in six major areas. What six major areas should the student nurse consider? 3. After the conclusion of the first visit, the community health nurse cautions the student nurse to be consciously aware of any ethnocentrism attitudes toward other cultures and the importance of cultural diversity. What is ethnocentrism and why is it so important to be conscious of cultural diversity?
.
Case Study Chapter 10 Boss, We’ve got a problemBy Kayla Cur.docxmoggdede
Case Study: Chapter 10
Boss, We’ve got a problem
By Kayla Curry
Background
Charlie Upton was the most beloved citizen of the close knit village of Summit. Everyone knew and respected Charlie. As a 17 year veteran of the police department, he was valued and admired for his unyielding care for the community. Charlie Upton gained acclaim for his heavy involvement in youth activities. He coached the boys pee-wee football team to victory in back to back seasons. He was known to get passionate about a bad call by referees. Coach Upton cared so much for his team, he generously offered to reward the team with a trip to Disney World. The man was even President of the local school board at one time. The highlight of the Christmas season was when he would dress up as a convincing Santa Claus for all of Summit’s children and visit the elementary schools.
Cont.
Charlie Upton’s popularity within Summit was unparalleled. Upton was known to rub shoulders with the Village’s elite. Primarily Village Administrator Tim Bell, whose son was star quarterback of Upton’s pee-wee team, and his own boss Police Chief Martin Owens. It was safe to say, nobody was expecting the coming scandal that would forever shake the community of Summit.
When Chief Martin Owens first heard the news, he decided to run straight to Administrator Tim Bell for direction. Highly unsettled, together they came up with a plan to combat the coming storm.
Cont.
Chief Owens and Administrator Bell called Charlie Upton into the Chief’s office and demanded an explanation to the allegations brought against him. A 12 year old boy who was being treated by a social worker for emotional problems, claimed that he had been sexual molested by none other than the Department’s beloved Charlie Upton.
When confronted with the accusations Upton replied simply, “well, there goes 17 years of police work down the drain.” Taking Upton’s non-denial as admission of guilt, Bell furiously demands he surrenders his badge and places him on unpaid leave on the spot. An outside agency would handle a 3 week investigation into the charges and in the meantime nobody outside of those three parties would know why Charlie Upton was being investigated.
Cont.
The investigation was completed and Upton was charged with criminal sexual conduct with a minor. He was immediately terminated. Against legal advice Administrator Bell refused to pay Upton’s separation pay of $26,000 in unused vacation time and sick leave.
From that point, the Village of Summit turned into a political circus:
Anticipating tough questions, Bell and Owens crafted their responses ahead of time
Pending public announcement Administrator Bell held a closed door meeting with the Council informing them that the Officer in charge of youth offenses was a child molester
Three of the Council members didn’t believe Upton would do such a thing and demanded Bell put him back in a uniform and on the streets
When the public was made aware they went int.
CASE STUDY Caregiver Role Strain Ms. Sandra A. Sandra, a 47-year-o.docxmoggdede
CASE STUDY: Caregiver Role Strain: Ms. Sandra A. Sandra, a 47-year-old divorced woman, received a diagnosis of stage 3 ovarian cancer 4 years ago, for which she had a total hysterectomy, bilateral salpingo- oophorectomy, omentectomy, lymphadenectomy, and tumor debulking followed by chemotherapy, consisting of cisplatin (Platinol), paclitaxel (Taxol), and doxorubicin (Adriamycin). She did well for 2 years and then moved back to her hometown near her family and underwent three more rounds of secondline chemotherapy. She accepted a less stressful job, bought a house, renewed old friendships, and became more involved with her two sisters and their families. Sandra developed several complications, including metastasis to the lungs. Then she could no longer work, drive, or care for herself. She had been told by her oncologist that there was nothing else that could be done and that she should consider entering a hospice. She met her attorney and prepared an advance directive and completed her will. She decided to have hospice care at home and, with the help of her family, set up her first floor as a living and sleeping area. She was cared for by family members around the clock for approximately 3 days. Sandra observed that she was tiring everyone out so much that they could not really enjoy each other’s company. At this time, she contacted the Visiting Nurse Association (VNA) to seek assistance. Her plan was to try to enjoy her family and friend’s visits. After assessment, the VNA nurse prioritized her problems to include fatigue and caregiver role strain. Other potential problem areas that may need to be incorporated into the care plan include anticipatory grieving and impaired comfort.
Reflective Questions
1. What are some of the stresses on Sandra’s middle-aged sisters and their families?
2. What resources are available to manage these stresses and support the sisters while caring for their dying sister Sandra?
3. Describe Sandra’s feelings about dependency and loss of autonomy because she is unable to do her own activities of daily living any longer
.
Case Study Answers Week 7 and 8Group OneIn your grou.docxmoggdede
Case Study Answers Week 7 and 8
Group One
In your group, prepare a business portfolio analysis on the InFocus businesses
Focus on the following:
Prepare the following charts and plot the InFocus Beverages business:
BCG matrix
GE-McKinsey matrix
Synergy matrix
Provide a recommendation advising InFocus what it should do with this business
Group Two
In your group, prepare a business portfolio analysis on the InFocus businesses
Focus on the following:
Prepare the following charts and plot the InFocus Snackfoods business:
BCG matrix
GE-McKinsey matrix
Synergy matrix
Provide a recommendation advising InFocus what it should do with this business
Group Three
In your group, prepare a business portfolio analysis on the InFocus businesses
Focus on the following:
Prepare the following charts and plot the InFocusSupplements business:
BCG matrix
GE-McKinsey matrix
Synergy matrix
Provide a recommendation advising InFocus what it should do with this business
Group Four
In your group, prepare a business portfolio analysis on the InFocus businesses
Focus on the following:
Prepare the following charts and plot the InFocus Sportswear business:
BCG matrix
GE-McKinsey matrix
Synergy matrix
Provide a recommendation advising InFocus what it should do with this business
2
InFocus Business Statistics
Market Statistics
Week 7 inFocus case
3
BCG Matrix
GE-Mckinsey Matrix
Synergy Matrix
Recommendations
InFocus Beverages: Star, Growth, Fit – Keep and invest in this business
InFocus Snack foods: Cash Cow, Selective, Giver – Keep this business but minimise further investment
InFocus Supplements: Question Mark, Selective, Taker – Keep this business and consider further investment
InFocus Sportswear: Dog, Harvest, Misfit – Sell this business
Group One
In your group, prepare a report for Jackie on InFocus’s dynamic capability
Focus on the following:
Explain the concept of dynamic capability
Discuss the principle of core competency and identify an InFocus core competency
List three types of activities InFocus could perform to develop dynamic capabilities and provide a specific example for each
Group Two
In your group, prepare a report for Jackie on InFocus’s dynamic capability
Focus on the following:
Explain the concept of learning
Discuss how learning is captured and leveraged by organisations
Demonstrate how InFocus could apply the 5 why process to learn more about its current processes
Group Three
In your group, prepare a report for Jackie on InFocus’s dynamic capability
Focus on the following:
Explain the concept of integration
Discuss why the successful integration of strategic assets and new learnings into business processes is so important
List and discuss three techniques or models that InFocus could integrate into its current processes and recommend the adoption of one of them
Group Four
In your group, prepare a report for Jackie on InFocus’s dynamic capability
Focus on the following:
Explain the need for transformatio.
Case Study and Transition Plan TemplateCase StudyD.docxmoggdede
Case Study and Transition Plan Template
Case Study
Darren is a 17-year-old student. He is a junior at his local high school. Darren has a specific learning disability in reading. He attends the resource classroom for English classes. All other courses are in the general education setting with accommodations, modified grades (for some subjects), and push-in supports from the special education teacher at least three times per week for core courses requiring extensive reading and writing. He is currently decoding at the fifth grade reading level, but reading comprehension is at the third grade level. Fluency is at the fifth grade level.
Darren also has difficulty with written expression, and needs graphic organizers and pre-writing activities to help him develop a thesis statement and organize his written work. His handwriting is difficult to read and it takes him a long time to complete written assignments without assistive technology and software. He can be impulsive, and will sometimes miss important portions of written directions resulting in frequent errors on assignments. He frequently turns in assignments late or not at all. He needs assistance remembering to take his medication at school and at home. He has tried to pass a driver’s license exam so he can get a driver’s permit to learn how to drive. However, his impulsivity and reading ability have affected his performance and he has not been able to pass the written exam as required by the state motor vehicle department.
Darren loves cars. He can describe makes and models of practically any vehicle and describe the type of engine and standard features. He also helps his dad and older brother work on vehicles in the family’s car restoration business. Darren can wash the cars, detail the interior, and clean the windows. He has recently started doing oil changes with some supervision.
His parents are concerned about Darren’s impulsivity, his inability to remember directions, and his unrealistic views of his abilities. His mother is concerned about him needing prompts to brush his teeth, wear clean clothes, and comb his hair before leaving the house. He tends to blame others when he is not successful and makes excuses for not following through on responsibilities. His father expressed concern about Darren’s difficulty in putting tools away in the shop and cleaning up his work area after he changes the oil in a vehicle. Teachers express concern over late assignments, a reluctance to take responsibility for his own actions, and the need for constant prompts and reminders. Darren uses an electronic spelling dictionary and a word processor with word prediction software and spell check to complete assignments.
Darren’s parents indicated on a parent survey that they do not know if Darren would be eligible to receive adult services, social security, and they do not know how to contact adult service agencies.
During a student interview, Darren stated he wanted to become a professional foo.
Case Study AnalysisRead Compassion for Samantha Case Study.docxmoggdede
Case Study Analysis
Read
Compassion for Samantha Case Study
Samantha Lizonia has been with Prestige Shipping for 35 years. As one of the first employees hired when the business launched, she has weathered many storms with the company, including receiving late paychecks, times of slow growth, a year where she worked 7 days a week without fail, and working for 4 years in a row without a vacation or sick day. As the office manager, she greets all visitors and is the first point of contact when customers and vendors calls. The CEO always praises Samantha and often states that without her diligence and faithfulness all those years they may not have survived.
Unfortunately, Samantha’s job performance has been declining. She has submitted reports untimely and unfinished, been late to work, and has become cold and difficult to work with. Coworkers and vendors complain about her rude comments and harsh demeanor. The CEO spoke to Samantha about her performance and behavior, but nothing has changed. Actually, she did not appreciate being reprimanded, and her behavior got worse. However, during their meeting, the CEO did find out that Samantha is planning on retiring in 2 years, and the value of her retirement savings plan has drastically declined.
If Samantha would have been any other employee, she would have been fired a long time ago. Because of her age, years of loyal service, lack of retirement savings, and the CEO’s commitment to continuing the family-like environment, this is a difficult choice. However, he knows that he must come to a decision about her soon.
Consider
the following:
SHRM ethical guidelines
Ethical processes for hiring, evaluating, disciplining, and terminating employees
Regulations for equal opportunity and employee rights
Commonly held values such as compassion, courage, integrity, and wisdom that can help people clarify their differences with others, understand their positions, and communicate values more effectively
Disagreements about moral choices in an organization are a natural part of doing business. Appreciate the viewpoints of other parties instead of vilifying them. Anticipate these disagreements by developing strategies for dealing with the most common conflicts you will face in your work.
Your personal strengths, unique voice, core identity and desired self-image.
Potential arguments that others will use to support immoral or unethical behavior
Write
a 1,050- to 1,400-word analysis of the scenario. Include the following:
Describe the ethical dilemma presented in the scenario, and explain why it is an ethical dilemma.
Describe the government and industry regulations relevant to this scenario.
Explain why specific elements from SHRM guidelines would apply to this situation.
Describe the ethical way to resolve the issue with Samantha.
Justify your resolution.
Format
your paper according to APA guidelines.
Reference
2 peer-reviewed scholarly ariticles
.
Case Study AnalysisAn understanding of cells and cell behavi.docxmoggdede
Case Study Analysis
An understanding of cells and cell behavior is a critically important component of disease diagnosis and treatment. But some diseases can be complex in nature, with a variety of factors and circumstances impacting their emergence and severity.
Effective disease analysis often requires an understanding that goes beyond isolated cell behavior. Genes, the environments in which cell processes operate, the impact of patient characteristics, and racial and ethnic variables all can have an important impact.
An understanding of the signals and symptoms of alterations in cellular processes is a critical step in the diagnosis and treatment of many diseases. For APRNs, this understanding can also help educate patients and guide them through their treatment plans.
In this Assignment, you examine a case study and analyze the symptoms presented. You identify cell, gene, and/or process elements that may be factors in the diagnosis, and you explain the implications to patient health.
Scenario: Case study
An 83-year-old resident of a skilled nursing facility presents to the emergency department with generalized edema of extremities and abdomen. History obtained from staff reveals the patient has history of malabsorption syndrome and difficulty eating due to lack of dentures. The patient has been diagnosed with protein malnutrition
To prepare:
By Day 1 of this week, you will be assigned to a specific case study for this Case Study Assignment. Please see the “Course Announcements” section of the classroom for your assignment from your Instructor.
The Assignment (1- to 2-page case study analysis)
Develop a 1- to 2-page case study analysis in which you:
Explain why you think the patient presented the symptoms described.
Identify the genes that may be associated with the development of the disease.
Explain the process of immunosuppression and the effect it has on body systems
Develop a 1- to 2-page case study analysis, examining the patient symptoms presented in the case study. Be sure to address the following:
Explain why you think the patient presented the symptoms described.
28 (28%) - 30 (30%)
The response accurately and thoroughly describes the patient symptoms.
The response includes accurate, clear, and detailed reasons, with an explanation for the symptoms supported by evidence and/or research, as appropriate, to support the explanation.
25 (25%) - 27 (27%)
The response describes the patient's symptoms.
The response includes accurate reasons, with an explanation for the symptoms supported by evidence and/or research, as appropriate, to support the explanation.
23 (23%) - 24 (24%)
The response describes the patient's symptoms in a manner that is vague or inaccurate.
The response includes reasons for the symptoms, with explanations that are vague or based on inappropriate evidence/research.
0 (0%) - 22 (22%)
The response describes the patient symptoms in a manner that is vague and inaccurate, or the de.
Case Study Analysis and FindingsThe final assignment for this co.docxmoggdede
Case Study Analysis and Findings
The final assignment for this course is a Case Study Analysis and Findings. The purpose of the Case Study Analysis and Findings is for you to utilize the knowledge and skills developed in this course to evaluate the psychological methods and theoretical models of criminal behavior as well as the police psychology and the psychological aspects of all participants in the criminal justice process relative to a specific criminal episode. An overview of forensic psychology as it relates to the criminal justice process should be included.
This course has addressed issues of psychological theory and practice relative to the functioning of the criminal justice system. These impacts range from the offender, to law enforcement and investigations, to practices and legalities of law in the courtroom, to the participation and impact of victims and witnesses, and to treatment and sentencing rendered in the correctional environment. Research continues regarding the biological, genetic, psychological, and social impacts on mental health and resulting behavior. These findings will continue to find their way into the legal implications of the psychological influences on behavior.
The focus of your Case Study Analysis and Findings paper will be based, in large part, on the weekly assignments you completed throughout the course. In each of the weekly assignments, you address a particular aspect of the overall criminal case and offender that you selected in Week 1.
In the Week 1 Literature Review assignment, you provide the resources necessary for each phase of your final analysis and findings.
In the Week 2 Case Summary and Offender Profile assignment, you provide an analysis of the behavior of the offender relative to the psychological history and evaluation of the offender.
In the Week 3 Investigative Psychology assignment, you provide an analysis of the behavior of the investigators including the analysis of the crime scene. This assignment also describes the psychological, behavioral, environmental, and cognitive factors that influence the investigation, including intervention strategies to reduce the impact of stress on law enforcement.
In the Week 4 Legal Psychology and Victimization assignment, you provide a discussion on the role of the psychological profile of the offender and the victims have on the presentation of evidence in court, including the analysis of legal psychology as it is implemented in the criminal justice process.
Finally, in the Week 5 Psychological Treatment in Correctional Settings assignment, you provide a discussion on the impacts the psychological make–up of offenders have on the functional responsibilities of incarceration facilities and how the biases and assumptions of correctional service providers influence their assessment of and interaction with these offenders.
Utilizing your research and analyses completed for the Weeks 1 through 5 assignments, consider the psychological methods .
Case Study Analysis A TutorialWhat is it Case studies are a .docxmoggdede
Case Study Analysis: A Tutorial
What is it? Case studies are a popular and effective teaching tool for business and non-business students. Often described as the “Harvard method,” case studies permit students to apply learned concepts and techniques to “real world” situations. Although our assignments are individual work only, case studies may also allow students to use their knowledge of course material in addressing business/marketing problems or issues through collaboration (much as in the workplace). Case studies may be quite detailed or simple in scope. In some assignments, strong familiarity with financial analysis and operations management are needed to successfully complete the case.
How to be effective? For any case study assignment, common sense; research; and a good understanding of basic marketing/management concepts are needed. You should carefully read the case several times, highlighting information/details that you believe important. Understand what the assignment is requesting. In the Popchips and Grand Theft Auto cases, you are asked questions for response. In addressing each question, you should justify (document) your answer with case information and additional Internet research. All sources should be properly cited.
It is important that you do not assume anything. Many students err in case analysis by confusing personal opinion or inference (guess) with the facts presented in the case. It is permissible (and, often required) to supplement case information with various research methods (i.e., observation and/or Internet) gain a clearer understanding of the issues, forces, questions and requirements of the case. Rely on the text book and lecture notes to help you.
Put yourself in the case as the key decision maker(s). What needs to be addressed concerning marketing? What could have been done differently? What should the marketing strategy (plan) be going forward? Be prepared to explain your reasoning.
Most importantly, don’t procrastinate on this assignment. Your time well-spent will result in a well-done report.
In summary, to complete a case study assignment successfully, you must:
1. Read the case thoroughly several times.
2. Complete independent research about the case issue/topic.
3. Identify and verify sources.
4. Answer the questions contained in the case with completeness and accuracy using case and research information.
5. Write your report and proof it for grammar, spelling and punctuation mistakes.
A Rite of Passage Approach
Designed to Preserve the
Families of Substance-Abusing
African American Women
Vanesta L. Poitier, Makini Niliwaambieni, and
Cyprian Lamar Rowe
This article approaches the treatment of addicted
African American women in ways drawn from
traditional African culture. While the modern African
American woman is clearly not the same as her
continental African foremother, the reality of her life
is still predicated on the basis of her culture and
her material wealth or.
Case Study AlcoholCertain occasional behaviors can cause more tro.docxmoggdede
Case Study: Alcohol
Certain occasional behaviors can cause more trouble than one might think. For many college students, drinking does not seem dangerous and is often viewed as a normal. Alcohol absorption and factors involved with alcohol metabolism are rarely discussed.
Review the following case study and answer the questions in essay format.
Paulo is a sophomore in college. On the weekends he goes out with his friends and will have anywhere from 5-8 drinks during the evening. Paulo met his friends during freshman year and they all agree that drinking is part of the college experience. Paulo always has a hangover after a big night of drinking, but doesn't think it's an issue because he never drinks on the weekdays and it isn't affecting his schoolwork. On a football weekend that included a lot of drinking, one of Paulo's friends, Luke, got into a fight and ended up in the emergency room. The doctor told Luke his Blood Alcohol Concentration was so high that he nearly had alcohol poisoning. Although Paulo knew drinking and driving could be dangerous, Paulo was surprised that the doctor warned Luke about "binge drinking." Paulo began to wonder whether his drinking was affecting his own health.
How common is binge drinking in college? What factors increase an individual's risk for the short and long term effects of alcohol? Why do college students like Paulo feel it is part of the college experience to drink regularly? What should universities, parents, friends, and others do to address high risk drinking and to change these behaviors?
4 Essays, 1 essay per Part:
Part I: Finding the Perfect Balance
Chapter # 1 General Health Concepts
Chapter # 2 Promoting and Preserving Your Psychological Health
Chapter # 3 Managing Stress: Managing Stress and Coping with Life Challenges
Chapter # 4 Preventing Violence and Injury
Part II: Building Healthy Relationships
Chapter # 5 Understanding Sexuality
Chapter # 6 Considering your Reproductive Alternatives
Part III: Avoiding Risks Related to Bad Habits
Chapter # 7 Recognizing and Avoiding Addiction and Drug Use
Chapter # 8 Drinking Alcohol Responsibly and Ending Tobacco Use
Part IV: Building Healthy Lifestyles
Chapter # 9 Eating for a Healthier You
Chapter # 10 Reaching and Maintaining a Healthy Weight
.
Case study A group of nurse educators are having a discussion about.docxmoggdede
Case study: A group of nurse educators are having a discussion about the minority student nurses. The nurse educators believe that there are numerous barriers to minority student success in nursing education. The nurse educators want to develop strategies to increase the success rate in graduation of these students.
1. The nurse educators make a list of the barriers that exist for minority student success. What are common barriers for minority student success?
2. The group of nurse educators is acutely aware that different generations are represented in nursing today. These different generations have different attitudes and value systems, which greatly affect the settings in which they work. What are the key characteristics of the four generational groups that are present in today’s workforce?
3. Analyze and describe how the different generations present in nursing today affect nursing care and the nursing workplace.
.
Case study ;1Callista Roy and Betty Neumans theories view the.docxmoggdede
Case study ;1
Callista Roy and Betty Neuman's theories view the person (individual, group, or community) as a holistic adaptive system that constantly interacts with the internal and external environments. Both theories view the person as being the center of nursing and present health/wellness and illness as parts of the same continuum, however there are some key assumptions that are different. As such, select one of the theories and identify1 assumption of the theory and discuss how the care rendered for this patient by an advanced practice nurse would be structured (assessment, diagnosis, planning, intervention, evaluation) according to the theory. Give 2 specific examples of interventions that you anticipate will be included in the patient's care.
Mr. Reynolds is a 32 year-old male patient hospitalized on the orthopedic unit of the hospital. He is status-post motorcycle accident and right leg below the knee amputation. He has a history of Depression and Schizophrenia. He is currently separated from his wife and estranged from his family. He is awaiting social work for placement in a rehabilitation facility, where he will continue his recovery.
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Case Study 9Running head BP & THE GULF OF MEXICO OIL SPILLC.docxmoggdede
Case Study 9
Running head: BP & THE GULF OF MEXICO OIL SPILL
Case Study: BP & The Gulf of Mexico Oil Spill
Central Michigan University
Organizational Dynamics & Human Behavior – MSA 601
Abstract
This paper will focus on the monumental disaster and ensuing public relations nightmare of British Petroleum (BP). This disaster of course was brought about by the oil rig explosion and fire in the Gulf of Mexico. BP is a multinational conglomerate of gargantuan proportions. They have molded and perfected their public image over decades. This paper will take a look at the lapses in BP’s management and public relations efforts and what measures the company should have taken.
BP & the Gulf of Mexico Oil Spill
The reason that the authors selected to evaluate British Petroleum (BP) for a case study was due in no small part to the endless media attention given to the oil spill in the Gulf. BP is an extremely popular brand that everyone in this country undoubtedly is effected by in one way or another. One of the initial reasons for choosing BP was the unmitigated disaster put forth on the public relations front in explaining the company’s efforts at dealing with the Gulf of Mexico oil crisis. The authors were further intrigued at this assignment for the poor leadership and decision making acumen of the former CEO Tony Hayward (CMU, 2009, p. 227). With this multi-focal approach, the study will highlight the conflicting messaging presented to the public and the lackluster and ultimately ineffective leadership within the organization.
BP is a huge multinational conglomerate whose primary focus is the petroleum industry. The company does business in over 30 countries around the globe. Its annual operating income is $239 billion dollars with over $14 billion dollars in profit in the year 2009. The company employs over 80,300 individuals and owns 16 refineries worldwide. BP operates several subsidiaries under the names AM/PM markets, BP and ARCO gas stations, Aral gas stations in Germany, Wild Bean Café, and Castrol Motor Oil (BP at a glance, 2010).
The competition within the petroleum industry is not as plentiful as one might think. There are actually very few players in the game. Due to the limited number of refiners of crude in this country the oil from various sources are blended prior to coming to the consumer. BP doesn’t have much use for the service station business anymore. In 2007, it announced plans to sell the last 700 stations that it hadn’t already sold to franchisees. The company chose to focus on finding and collecting oil. Once companies make a discovery, it comes out of the ground and ends up at a refinery. There, it can be mixed with oil that a variety of companies have poured into the tanks. This is further evidenced by BP’s plans to divest itself of its remaining 700 gas service stations. The highest percentage of income is made from oil exploration and extraction and not in the selling of gasoline at its stations (Lieber, 2010).
BP.
Case Study 9-1 IT Governance at University of the Southeast. Answer .docxmoggdede
Case Study 9-1 IT Governance at University of the Southeast. Answer question 1. Describe the IT governance system that was in place at the University of the Southeast using both decision rights and structure as the basis of goverance.
Note: Minimum 300 words not including title and reference page. References should be taken from peer revived
.
Case Study 7-2 Sony Pictures The Criminals Won. Answer question 2 W.docxmoggdede
Case Study 7-2 Sony Pictures: The Criminals Won. Answer question 2 What access and data protection controls would you recommend Sony use to provide better security for unreleased digital films and emails?
Note: Minimum 300 words not including title and reference page. References should be taken from peer revived
.
Case Study 8.1 Team DenialEmory University Holocaust studies pr.docxmoggdede
Case Study 8.1: Team Denial
Emory University Holocaust studies professor Deborah Lipstadt faced an uphill battle when she was sued by British amateur historian David Irving in 1995. Irving was the world’s best known Holocaust denier. He claimed that Hitler didn’t order the killing of Jews. Instead, the Führer’s subordinates acted on their own, without his knowledge. Irving’s most audacious assertion was that no Jews and other victims were gassed at the Auschwitz concentration camp. He denied that there were gas chambers. Instead, deaths were caused by typhus and other illnesses, not murder. Speaking before neo-Nazi groups, Irving declared that more people died in the back of Senator Edward Kennedy’s car (one young woman) than were deliberately killed at Auschwitz.
In her book Denying the Holocaust: The Growing Assault on Truth and Memory, professor Lipstadt called Irving “a Hitler partisan wearing blinkers” who distorted historical evidence to “reach historically untenable conclusions.”1 Irving then threatened to sue unless she retracted her comments. He likely thought she would settle out of court. Not Lipstadt. Surrender would give deniers a victory, meaning a “second death” to the victims of Auschwitz and other Jews who perished under the Nazis. But Irving had the upper hand. Under British law, Lipstadt had to defend herself from the allegations. (In the United States, accusers have to prove that they have been libeled and defamed.) The lengthy court case would cost over a million dollars to fight and would be held in London, thousands of miles from Atlanta, where Lipstadt taught.
Fortunately for Dr. Lipstadt, others rallied to her cause. Emory gave her financial support and paid leave while hiring adjuncts to teach her classes. (School officials believed that canceling Holocaust courses would be a victory for Irving.) Penguin, her publisher, provided legal and financial support and Jewish groups raised money for her defense. Most important, she gained the support of a top-notch legal team who believed in her cause. This team included (1) those who prepared her case—a team of researchers who gathered information and the attorneys who assembled court documents; and (2) a pair of barristers who argued in front of the judge. (In Britain, one set of attorneys prepares the case while a different set of attorneys presents the case in court.) Lipstadt needed all the help she could get. Preparation for the trial took five years. Researchers had to sift through thousands of documents checking footnotes as well as hundreds of Irving’s personal diaries. They generated an eight-foot-tall stack of trial notebooks.
The legal team decided to put Irving on trial, demonstrating how he systematically altered historical evidence to support his anti-Semitic views. That meant that Deborah wouldn’t testify, turning her into a spectator at her own trial. Lipstadt, a skilled public speaker, objected to these restrictions but eventually gave in. She said, “Being q.
Case Study 7 Solving Team Challenges at DocSystems Billing, Inc.docxmoggdede
Case Study 7: Solving Team Challenges at DocSystems Billing, Inc.
Read the DocSystems Billing case, including the briefing document and four scenes, and consider the following questions:
What problems exist in this organization? How do these problems differ based on the employees’ roles? Why do employees object to Jim’s proposed solution?
Make a recommendation to the client about what could be done next based on the data included. Summarize your observations for Jim, offer possible interpretations, and suggest an approach for next steps.
Briefing Document: DocSystems Billing, Inc.
About the Company
DocSystems Billing, Inc., processes insurance billing paperwork for a network of small health care clinics throughout the United States. Privately owned physician practices, as well as specialists such as cardiologists and physical therapists, contract with DocSystems to process the billing paperwork through the maze of health care insurance companies and networks. DocSystems charges either a flat fee for each bill it processes or a percentage of the total, depending on the contract with the provider.
About the Call Center
Forty full-time employees work at the onsite call center: 30 Medical Insurance Specialists (who handle cases of moderate complexity) and 10 Senior Insurance Consultants (who handle very complex cases). The senior consultants have usually worked up through the ranks, often first working on basic billing, then as medical insurance specialists. Most of them have a long tenure with DocSystems, ranging from 17 to 23 years.
An additional 100 employees (called Billing Specialists) work at an outsourced call center. DocSystems contracts out the initial processing of claims and basic computer input. The contract employees used to work at DocSystems until the outsourcing.
285
The call center was outsourced a year ago to another organization. Almost all of the former DocSystems employees were offered jobs with the new company, but the pay and benefits were not comparable. Word has spread to the former colleagues who remain at DocSystems that the outsourcing company treats its employees poorly.
Call Center Reorganization
The remaining group of 40 employees was reorganized into two new teams about 3 months ago. Initially, there had been two managers—Alex managed the senior insurance consultants, and Dana managed the medical insurance specialists. Both reported to Jim, the senior director. In the new structure, Alex and Dana both manage 20 employees, with each managing half of the specialists and half of the consultants.
That meant that some of each group remained with their former manager, while some moved to a new manager. Senior management hoped that the integrated teams would start to share knowledge between more senior and more junior practitioners.
Roles and Work Process
Billing Specialist
The billing specialists do the initial computer input and handle the majority of the cases. Normally this occurs without any need .
Case Study 5.2 Hiding the Real Story at Midwestern Community Acti.docxmoggdede
Case Study 5.2: Hiding the Real Story at Midwestern Community Action
Recently, life at Midwestern Community Action has been anything but smooth. The nonprofit runs a variety of programs in a midsized city, including preschools, teen drop-in centers, a food pantry, a medical clinic, and low-income housing. Health problems forced founding executive director Sally May, who was well loved by staff, to quit after 20 years in her position. The board then appointed Josiah Lang, who had served as the manager of a local government service agency, as the next executive director.
When Lang arrived at Community Action, he discovered that May had been a hands-off leader. She allowed coordinators to run their programs without much supervision. Used to operating on their own, they resisted Lang’s efforts to institute performance evaluations, to evaluate the effectiveness of each program, and to reallocate funds between programs. It didn’t help that Lang made little effort to get to know his subordinates and has an abrasive personality. Three coordinators and a half dozen front-line staff quit. Lang has the support of the board, which believes that the organization needs more structure and accountability, but staff morale is low. Employees have lost faith in the organization’s leadership. However, they remain committed to helping the disadvantaged and to Community Action’s mission. For that reason, they largely keep their frustrations to themselves and are careful to protect the organization’s public image. Community Action continues to be well regarded by clients, government officials, donors, and the public at large.
This week Community Action will interview an applicant for its housing coordinator position, a vacancy created when the previous coordinator left in frustration. This is the most important open position to fill. The housing coordinator oversees three apartment complexes with 200 tenants and manages the most employees. Failure to fill the vacancy soon could reduce Community Action’s outreach to the homeless. The applicant, Albert Singh, appears to be highly qualified. If he takes the position, Singh will move his family from out of state. He has no idea that Community Action is dealing with significant conflict and poor morale.
Singh will make a brief presentation to the entire staff during his visit and then meet for an extended time with the current program coordinators. During this session, the coordinators (without the director present) will question him and present an overview of Community Action. Albert will also have an opportunity to ask questions of the coordinators.
Discussion Probes
1. What ethical duties are in conflict in this situation?
2. Are Community Action employees justified in keeping their concerns “in house,” out of the public eye? Why or why not?
3. If you were one of the current program coordinators, how much would you reveal about the turmoil at Community Action to Singh?
4. As a coordinator, what would you say if Singh.
Case Study 5.1Write a 3 to 4 (not including title or reference.docxmoggdede
Case Study 5.1
Write a 3 to 4 (not including title or reference page) page paper that describes some your state laws protecting data or security of personal information (the state you live in ,have lived in, or want to live in). First, list the state you chose. Then provide the name and a brief description of the law, to include when it was enacted, punishment if not followed, and who/what the law protects. Make sure you follow the grading rubric and write your paper in APA format. Cite all sources appropriately.
Writing Requirements
4 pages in length (excluding cover page, abstract, and reference list)
Include at least two peer reviewed sources that are properly cited
APA format, Use the
APA template
located in the
Student Resource Center
to complete the assignment.
Please use the Case Study Guide as a reference point for writing your case study.
.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
Francesca Gottschalk - How can education support child empowerment.pptxEduSkills OECD
Francesca Gottschalk from the OECD’s Centre for Educational Research and Innovation presents at the Ask an Expert Webinar: How can education support child empowerment?
2024.06.01 Introducing a competency framework for languag learning materials ...Sandy Millin
http://sandymillin.wordpress.com/iateflwebinar2024
Published classroom materials form the basis of syllabuses, drive teacher professional development, and have a potentially huge influence on learners, teachers and education systems. All teachers also create their own materials, whether a few sentences on a blackboard, a highly-structured fully-realised online course, or anything in between. Despite this, the knowledge and skills needed to create effective language learning materials are rarely part of teacher training, and are mostly learnt by trial and error.
Knowledge and skills frameworks, generally called competency frameworks, for ELT teachers, trainers and managers have existed for a few years now. However, until I created one for my MA dissertation, there wasn’t one drawing together what we need to know and do to be able to effectively produce language learning materials.
This webinar will introduce you to my framework, highlighting the key competencies I identified from my research. It will also show how anybody involved in language teaching (any language, not just English!), teacher training, managing schools or developing language learning materials can benefit from using the framework.
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
Introduction to AI for Nonprofits with Tapp NetworkTechSoup
Dive into the world of AI! Experts Jon Hill and Tareq Monaur will guide you through AI's role in enhancing nonprofit websites and basic marketing strategies, making it easy to understand and apply.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
Acetabularia Information For Class 9 .docxvaibhavrinwa19
Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Normal Labour/ Stages of Labour/ Mechanism of LabourWasim Ak
Normal labor is also termed spontaneous labor, defined as the natural physiological process through which the fetus, placenta, and membranes are expelled from the uterus through the birth canal at term (37 to 42 weeks
Safalta Digital marketing institute in Noida, provide complete applications that encompass a huge range of virtual advertising and marketing additives, which includes search engine optimization, virtual communication advertising, pay-per-click on marketing, content material advertising, internet analytics, and greater. These university courses are designed for students who possess a comprehensive understanding of virtual marketing strategies and attributes.Safalta Digital Marketing Institute in Noida is a first choice for young individuals or students who are looking to start their careers in the field of digital advertising. The institute gives specialized courses designed and certification.
for beginners, providing thorough training in areas such as SEO, digital communication marketing, and PPC training in Noida. After finishing the program, students receive the certifications recognised by top different universitie, setting a strong foundation for a successful career in digital marketing.
14-‹#›PREVIEW OF CHAPTERIntermediate AccountingIFRS .docx
1. 14-‹#›
PREVIEW OF CHAPTER
Intermediate Accounting
IFRS 2nd Edition
Kieso, Weygandt, and Warfield
14
14-‹#›
Explain the accounting for long-term notes payable.
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
2. Apply the methods of bond discount and premium amortization.
14-‹#›
Non-current liabilities (long-term debt) consist of an expected
outflow of resources arising from present obligations that are
not payable within a year or the operating cycle of the company,
whichever is longer.
Examples:
Bonds payable
Long-term notes payable
Mortgages payable
Pension liabilities
Lease liabilities
Long-term debt has various covenants or restrictions.
BONDS PAYABLE
LO 1
14-‹#›
Bond contract known as a bond indenture.
Represents a promise to pay:
sum of money at designated maturity date, plus
periodic interest at a specified rate on the maturity amount (face
value).
Paper certificate, typically a €1,000 face value.
Interest payments usually made semiannually.
Used when the amount of capital needed is too large for one
lender to supply.
Issuing Bonds
3. LO 1
14-‹#›
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
14-‹#›
Types and Ratings of Bonds
Common types found in practice:
Secured and Unsecured (debenture) bonds.
Term, Serial, and Callable bonds.
Convertible, Commodity-Backed, Deep-Discount bonds.
4. Registered and Bearer (Coupon) bonds.
Income and Revenue bonds.
LO 2
14-‹#›
Corporate bond listing.
Company Name
Interest rate paid as a % of par value
Price as a % of par
Interest rate based on price
Creditworthiness
Types and Ratings of Bonds
LO 2
14-‹#›
After studying this chapter, you should be able to:
Non-Current Liabilities
14
5. LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
14-‹#›
Valuation of Bonds Payable
Issuance and marketing of bonds to the public:
Usually takes weeks or months.
Issuing company must
Arrange for underwriters.
Obtain regulatory approval of the bond issue, undergo audits,
and issue a prospectus.
Have bond certificates printed.
LO 3
14-‹#›
Valuation of Bonds Payable
Selling price of a bond issue is set by the
supply and demand of buyers and sellers,
6. relative risk,
market conditions, and
state of the economy.
Investment community values a bond at the present value of its
expected future cash flows, which consist of (1) interest and (2)
principal.
LO 3
14-‹#›
Interest Rate
Stated, coupon, or nominal rate = Rate written in the terms of
the bond indenture.
Bond issuer sets this rate.
Stated as a percentage of bond face value (par).
Market rate or effective yield = Rate that provides an acceptable
return commensurate with the issuer’s risk.
Rate of interest actually earned by the bondholders.
Valuation of Bonds Payable
LO 3
14-‹#›
How do you calculate the amount of interest that is actually
paid to the bondholder each period?
How do you calculate the amount of interest that is actually
recorded as interest expense by the issuer of the bonds?
7. Valuation of Bonds Payable
(Stated rate x Face Value of the bond)
(Market rate x Carrying Value of the bond)
LO 3
14-‹#›
Bonds Sold At
Market Interest
6%
8%
10%
Premium
Par Value
Discount
Assume Stated Rate of 8%
Valuation of Bonds Payable
LO 3
14-‹#›
Illustration: Santos Company issues R$100,000 in bonds dated
January 1, 2015, due in five years with 9 percent interest
payable annually on January 1. At the time of issue, the market
rate for such bonds is 9 percent.
Bonds Issued at Par
8. ILLUSTRATION 14-1
Time Diagram for Bonds
Issued at Par
LO 3
14-‹#›
Bonds Issued at Par
ILLUSTRATION 14-2
Present Value
Computation of
Bond Selling at Par
ILLUSTRATION 14-1
Time Diagram for Bonds
Issued at Par
LO 3
14-‹#›
Journal entry on date of issue, Jan. 1, 2015.
Bonds Issued at Par
Cash 100,000
9. Bonds payable100,000
Journal entry to record accrued interest at Dec. 31, 2015.
Interest expense 9,000
Interest payable9,000
Journal entry to record first payment on Jan. 1, 2016.
Interest payable 9,000
Cash9,000
LO 3
14-‹#›
Illustration: Assuming now that Santos issues R$100,000 in
bonds, due in five years with 9 percent interest payable annually
at year-end. At the time of issue, the market rate for such bonds
is 11 percent.
Bonds Issued at a Discount
ILLUSTRATION 14-3
Time Diagram for Bonds
Issued at a Discount
LO 3
14-‹#›
Bonds Issued at a Discount
ILLUSTRATION 14-3
10. Time Diagram for Bonds
Issued at a Discount
ILLUSTRATION 14-4
Present Value
Computation of
Bond Selling at Discount
LO 3
14-‹#›
Journal entry on date of issue, Jan. 1, 2015.
Bonds Issued at a Discount
Cash 92,608
Bonds payable92,608
Journal entry to record accrued interest at Dec. 31, 2015.
Interest expense ($92,608 x 11%)10,187
Interest payable9,000
Bonds payable1,187
Journal entry to record first payment on Jan. 1, 2016.
Interest payable 9,000
Cash9,000
LO 3
14-‹#›
When bonds sell at less than face value:
Investors demand a rate of interest higher than stated rate.
11. Usually occurs because investors can earn a higher rate on
alternative investments of equal risk.
Cannot change stated rate so investors refuse to pay face value
for the bonds.
Investors receive interest at the stated rate computed on the face
value, but they actually earn at an effective rate because they
paid less than face value for the bonds.
Bonds Issued at a Discount
LO 3
14-‹#›
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
14-‹#›
12. Bond issued at a discount - amount paid at maturity is more
than the issue amount.
Bonds issued at a premium - company pays less at maturity
relative to the issue price.
Adjustment to the cost is recorded as bond interest expense over
the life of the bonds through a process called amortization.
Required procedure for amortization is the effective-interest
method (also called present value amortization).
Effective-Interest Method
LO 4
14-‹#›
Effective-interest method produces a periodic interest expense
equal to a constant percentage of the carrying value of the
bonds.
Effective-Interest Method
ILLUSTRATION 14-5
Bond Discount and Premium Amortization Computation
LO 4
14-‹#›
Effective-Interest Method
Bonds Issued at a Discount
13. Illustration: Evermaster Corporation issued €100,000 of 8%
term bonds on January 1, 2015, due on January 1, 2020, with
interest payable each July 1 and January 1. Investors require an
effective-interest rate of 10%. Calculate the bond proceeds.
ILLUSTRATION 14-6
Computation of Discount on Bonds Payable
LO 4
14-‹#›
ILLUSTRATION 14-7
Bond Discount
Amortization Schedule
14-‹#›
Effective-Interest Method
Journal entry on date of issue, Jan. 1, 2015.
Cash 92,278
Bonds Payable92,278
ILLUSTRATION 14-7
Bond Discount
Amortization Schedule
LO 4
14-‹#›
14. Interest expense 4,614
Bonds payable614
Cash4,000
Journal entry to record first payment and amortization of the
discount on July 1, 2015.
Effective-Interest Method
ILLUSTRATION 14-7
Bond Discount
Amortization Schedule
LO 4
14-‹#›
Journal entry to record accrued interest and amortization of the
discount on Dec. 31, 2015.
Interest expense 4,645
Interest payable4,000
Bonds payable645
Effective-Interest Method
ILLUSTRATION 14-7
Bond Discount
Amortization Schedule
LO 4
14-‹#›
15. Illustration: Evermaster Corporation issued €100,000 of 8%
term bonds on January 1, 2015, due on January 1, 2016, with
interest payable each July 1 and January 1. Investors require an
effective-interest rate of 6%. Calculate the bond proceeds.
Bonds Issued at a Premium
ILLUSTRATION 14-8
Computation of Premium on Bonds Payable
LO 4
Effective-Interest Method
14-‹#›
ILLUSTRATION 14-9
Bond Premium
Amortization Schedule
14-‹#›
Effective-Interest Method
Journal entry on date of issue, Jan. 1, 2015.
Cash 108,530
Bonds payable108,530
ILLUSTRATION 14-9
Bond Premium
16. Amortization Schedule
LO 4
14-‹#›
Interest expense 3,256
Bonds payable744
Cash4,000
Journal entry to record first payment and amortization of the
premium on July 1, 2015.
Effective-Interest Method
ILLUSTRATION 14-9
Bond Premium
Amortization Schedule
LO 4
14-‹#›
What happens if Evermaster prepares financial statements at the
end of February 2015? In this case, the company prorates the
premium by the appropriate number of months to arrive at the
proper interest expense, as follows.
Effective-Interest Method
Accrued Interest
ILLUSTRATION 14-10
Computation of Interest
Expense
17. LO 4
14-‹#›
Evermaster records this accrual as follows.
Interest expense 1,085.33
Bonds payable248.00
Interest payable1,333.33
Effective-Interest Method
Accrued Interest
ILLUSTRATION 14-10
Computation of Interest
Expense
LO 4
14-‹#›
Bond investors will pay the seller the interest accrued from the
last interest payment date to the date of issue.
On the next semiannual interest payment date, bond investors
will receive the full six months’ interest payment.
Effective-Interest Method
Bonds Issued between Interest Dates
LO 4
14-‹#›
18. Illustration: Assume Evermaster issued its five-year bonds,
dated January 1, 2015, on May 1, 2015, at par (€100,000).
Evermaster records the issuance of the bonds between interest
dates as follows.
Effective-Interest Method
Cash 100,000
Bonds payable100,000
Cash2,667
Interest expense2,667
(€100,000 x .08 x 4/12) = €2,667
Bonds Issued at Par
LO 4
14-‹#›
On July 1, 2015, two months after the date of purchase,
Evermaster pays the investors six months’ interest, by making
the following entry.
Effective-Interest Method
Interest expense 4,000
Cash4,000
($100,000 x .08 x 1/2) = $4,000
Bonds Issued at Par
LO 4
14-‹#›
Bonds Issued at Discount or Premium
Effective-Interest Method
19. Illustration: Assume that the Evermaster 8% bonds were issued
on May 1, 2015, to yield 6%. Thus, the bonds are issued at a
premium price of €108,039. Evermaster records the issuance of
the bonds between interest dates as follows.
Cash 108,039
Bonds payable108,039
Cash2,667
Interest expense2,667
LO 4
14-‹#›
Evermaster then determines interest expense from the date of
sale (May 1, 2015), not from the date of the bonds (January 1,
2015).
Bonds Issued at Discount or Premium
Effective-Interest Method
ILLUSTRATION 14-12
Partial Period Interest
Amortization
LO 4
14-‹#›
The premium amortization of the bonds is also for only two
months.
Bonds Issued at Discount or Premium
20. Effective-Interest Method
ILLUSTRATION 14-13
Partial Period Interest
Amortization
LO 4
14-‹#›
Evermaster therefore makes the following entries on July 1,
2015, to record the interest payment and the premium
amortization.
Interest expense 4,000
Cash4,000
Bonds payable253
Interest expense253
Bonds Issued at Discount or Premium
Effective-Interest Method
LO 4
14-‹#›
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
After studying this chapter, you should be able to:
Non-Current Liabilities
21. 14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
14-‹#›
Accounting is Similar to Bonds
A note is valued at the present value of its future interest and
principal cash flows.
Company amortizes any discount or premium over the life of the
note.
LONG-TERM NOTES PAYABLE
LO 5
14-‹#›
BE14-9: Coldwell, Inc. issued a €100,000, 4-year, 10% note at
face value to Flint Hills Bank on January 1, 2015, and received
€100,000 cash. The note requires annual interest payments each
December 31. Prepare Coldwell’s journal entries to record (a)
the issuance of the note and (b) the December 31 interest
payment.
Notes Issued at Face Value
(a)Cash 100,000
Notes payable100,000
22. (b)Interest expense10,000
Cash10,000
(€100,000 x 10% = €10,000)
LO 5
14-‹#›
Notes Not Issued at Face Value
Issuing company records the difference between the face
amount and the present value (cash received) as
a discount and
amortizes that amount to interest expense over the life of the
note.
Zero-Interest-Bearing Notes
LO 5
14-‹#›
Illustration: Turtle Cove Company issued the three-year,
$10,000, zero-interest-bearing note to Jeremiah Company. The
implicit rate that equated the total cash to be paid ($10,000 at
maturity) to the present value of the future cash flows
($7,721.80 cash proceeds at date of issuance) was 9 percent.
Zero-Interest-Bearing Notes
ILLUSTRATION 14-14
Time Diagram for Zero-Interest Note
LO 5
23. 14-‹#›
Illustration: Turtle Cove Company issued the three-year,
$10,000, zero-interest-bearing note to Jeremiah Company. The
implicit rate that equated the total cash to be paid ($10,000 at
maturity) to the present value of the future cash flows
($7,721.80 cash proceeds at date of issuance) was 9 percent.
Turtle Cove records issuance of the note as follows.
Zero-Interest-Bearing Notes
Cash 7,721.80
Notes Payable 7,721.80
LO 5
14-‹#›
Zero-Interest-Bearing Notes
ILLUSTRATION 14-15
Schedule of Note
Discount Amortization
LO 5
14-‹#›
Zero-Interest-Bearing Notes
ILLUSTRATION 14-15
24. Schedule of Note
Discount Amortization
Turtle Cove records interest expense for year 1 as follows.
Interest Expense ($7,721.80 x 9%) 694.96
Notes Payable 694.96
LO 5
14-‹#›
Illustration: Marie Co. issued for cash a €10,000, three-year
note bearing interest at 10 percent to Morgan Corp. The market
rate of interest for a note of similar risk is 12 percent. In this
case, because the effective rate of interest (12%) is greater than
the stated rate (10%), the present value of the note is less than
the face value. That is, the note is exchanged at a discount.
Interest-Bearing Notes
ILLUSTRATION 7-16
Computation of Present Value—
Effective Rate
Different from
Stated Rate
LO 5
14-‹#›
Illustration: Marie Co. issued for cash a €10,000, three-year
note bearing interest at 10 percent to Morgan Corp. The market
rate of interest for a note of similar risk is 12 percent. In this
case, because the effective rate of interest (12%) is greater than
the stated rate (10%), the present value of the note is less than
25. the face value. That is, the note is exchanged at a discount.
Marie Co. records the issuance of the note as follows.
Interest-Bearing Notes
Cash 9,520
Notes Payable 9,520
LO 5
14-‹#›
Interest-Bearing Notes
ILLUSTRATION 14-16
Schedule of Note
Discount Amortization
LO 5
14-‹#›
Interest-Bearing Notes
ILLUSTRATION 14-16
Schedule of Note
Discount Amortization
Marie Co. records the following entry at the end of year 1.
Interest Expense 1,142
Notes Payable 142
Cash 1,000
LO 5
26. 14-‹#›
Notes Issued for Property, Goods, or Services
Special Notes Payable Situations
When exchanging the debt instrument for property, goods, or
services in a bargained transaction, the stated interest rate is
presumed to be fair unless:
No interest rate is stated, or
The stated interest rate is unreasonable, or
The stated face amount is materially different from the current
cash price for the same or similar items or from the current fair
value of the debt instrument.
LO 5
14-‹#›
Special Notes Payable Situations
If a company cannot determine the fair value of the property,
goods, services, or other rights, and if the note has no ready
market, the present value of the note must be determined by the
company to approximate an applicable interest rate
(imputation).
Choice of rate is affected by:
Prevailing rates for similar instruments.
Factors such as restrictive covenants, collateral, payment
schedule, and the existing prime interest rate.
Choice of Interest Rates
LO 5
14-‹#›
27. Special Notes Payable Situations
Illustration: On December 31, 2015, Wunderlich Company
issued a promissory note to Brown Interiors Company for
architectural services. The note has a face value of £550,000, a
due date of December 31, 2020, and bears a stated interest rate
of 2 percent, payable at the end of each year. Wunderlich cannot
readily determine the fair value of the architectural services,
nor is the note readily marketable. On the basis of Wunderlich’s
credit rating, the absence of collateral, the prime interest rate at
that date, and the prevailing interest on Wunderlich’s other
outstanding debt, the company imputes an 8 percent interest rate
as appropriate in this circumstance.
LO 5
14-‹#›
Special Notes Payable Situations
ILLUSTRATION 14-18
Time Diagram for Interest-Bearing Note
ILLUSTRATION 14-19
Computation of Imputed Fair Value and Note Discount
LO 5
14-‹#›
28. Special Notes Payable Situations
On December 31, 2015, Wunderlich records issuance of the note
in payment for the architectural services as follows.
Building (or Construction in Process) 418,239
Notes Payable 418,239
ILLUSTRATION 14-19
Computation of Imputed Fair Value and Note Discount
LO 5
14-‹#›
Special Notes Payable Situations
ILLUSTRATION 14-20
Schedule of Discount Amortization Using Imputed Interest Rate
LO 5
14-‹#›
Special Notes Payable Situations
Payment of first year’s interest and amortization of the
discount.
Interest Expense 33,459
Notes Payable 22,459
Cash 11,000
ILLUSTRATION 14-20
29. Schedule of Discount Amortization Using Imputed Interest Rate
LO 5
14-‹#›
Mortgage Notes Payable
A promissory note secured by a document called a mortgage
that pledges title to property as security for the loan.
Common form of long-term notes payable.
Payable in full at maturity or in installments.
Fixed-rate mortgage.
Variable-rate mortgages.
LO 5
14-‹#›
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
30. Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
14-‹#›
Extinguishment with cash before maturity,
Extinguishment by transferring assets or securities, and
Extinguishment with modification of terms.
Extinguishment of Non-Current Liabilities
SPECIAL ISSUES RELATED TO NON-CURRENT
LIABILITIES
LO 6
14-‹#›
Net carrying amount > Reacquisition price = Gain
Reacquisition price > Net carrying amount = Loss
At time of reacquisition, unamortized premium or discount must
be amortized up to the reacquisition date.
Extinguishment of Non-Current Liabilities
Extinguishment with Cash before Maturity
LO 6
14-‹#›
Illustration: Evermaster bonds issued at a discount on January
31. 1, 2015. These bonds are due in five years. The bonds have a
par value of €100,000, a coupon rate of 8% paid semiannually,
and were sold to yield 10%.
Extinguishment with Cash before Maturity
ILLUSTRATION 14-21
Bond Premium Amortization Schedule, Bond Extinguishment
LO 6
14-‹#›
Two years after the issue date on January 1, 2017, Evermaster
calls the entire issue at 101 and cancels it.
Evermaster records the reacquisition and cancellation of the
bonds as follows.
Bonds Payable 94,925
Loss on Extinguishment of Bonds 6,075
Cash 101,000
Extinguishment with Cash before Maturity
ILLUSTRATION 14-22
Computation of Loss on
Redemption of Bonds
LO 6
14-‹#›
Creditor should account for the non-cash assets or equity
interest received at their fair value.
Debtor recognizes a gain equal to the excess of the carrying
32. amount of the payable over the fair value of the assets or equity
transferred (gain).
Extinguishment of Non-Current Liabilities
Extinguishment by Exchanging Assets or Securities
LO 6
14-‹#›
Illustration: Hamburg Bank loaned €20,000,000 to Bonn
Mortgage Company. Bonn, in turn, invested these monies in
residential apartment buildings. However, because of low
occupancy rates, it cannot meet its loan obligations. Hamburg
Bank agrees to accept from Bonn Mortgage real estate with a
fair value of €16,000,000 in full settlement of the €20,000,000
loan obligation. The real estate has a carrying value of
€21,000,000 on the books of Bonn Mortgage. Bonn (debtor)
records this transaction as follows.
Note Payable (to Hamburg Bank) 20,000,000
Loss on Disposal of Real Estate 5,000,000
Real Estate 21,000,000
Gain on Extinguishment of Debt 4,000,000
Exchanging Assets
LO 6
14-‹#›
Illustration: Now assume that Hamburg Bank agrees to accept
from Bonn Mortgage 320,000 ordinary shares (€10 par) that
have a fair value of €16,000,000, in full settlement of the
€20,000,000 loan obligation. Bonn Mortgage (debtor) records
33. this transaction as follows.
Notes Payable (to Hamburg Bank) 20,000,000
Share Capital—Ordinary 3,200,000
Share Premium—Ordinary 12,800,000
Gain on Extinguishment of Debt 4,000,000
Exchanging Securities
LO 6
14-‹#›
Extinguishment with Modification of Terms
Creditor may offer one or a combination of the following
modifications:
Reduction of the stated interest rate.
Extension of the maturity date of the face amount of the debt.
Reduction of the face amount of the debt.
Reduction or deferral of any accrued interest.
LO 6
14-‹#›
Illustration: On December 31, 2015, Morgan National Bank
enters into a debt modification agreement with Resorts
Development Company. The bank restructures a ¥10,500,000
loan receivable issued at par (interest paid to date) by:
Reducing the principal obligation from ¥10,500,000 to
¥9,000,000;
Extending the maturity date from December 31, 2015, to
December 31, 2019; and
Reducing the interest rate from the historical effective rate of
34. 12 percent to 8 percent. Given Resorts Development’s financial
distress, its market-based borrowing rate is 15 percent.
Modification of Terms
LO 6
14-‹#›
IFRS requires the modification to be accounted for as an
extinguishment of the old note and issuance of the new note,
measured at fair value.
Modification of Terms
ILLUSTRATION 14-23
Fair Value of Restructured Note
LO 6
14-‹#›
The gain on the modification is ¥3,298,664, which is the
difference between the prior carrying value (¥10,500,000) and
the fair value of the restructured note, as computed in
Illustration 14-23 (¥7,201,336). Given this information, Resorts
Development makes the following entry to record the
modification.
Note Payable (old) 10,500,000
Gain on Extinguishment of Debt 3,298,664
Note Payable (new) 7,201,336
Modification of Terms
35. LO 6
14-‹#›
Amortization schedule for the new note.
Modification of Terms
ILLUSTRATION 14-24
Schedule of Interest and Amortization
after Debt Modification
LO 6
14-‹#›
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
36. Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
14-‹#›
Fair Value Option
Companies have the option to record fair value in their accounts
for most financial assets and liabilities, including bonds and
notes payable.
The IASB believes that fair value measurement for financial
instruments, including financial liabilities, provides more
relevant and understandable information than amortized cost.
LO 7
14-‹#›
Non-current liabilities are recorded at fair value, with
unrealized holding gains or losses reported as part of net
income.
Fair Value Measurement
Illustrations: Edmonds Company has issued €500,000 of 6
percent bonds at face value on May 1, 2015. Edmonds chooses
the fair value option for these bonds. At December 31, 2015, the
value of the bonds is now €480,000 because interest rates in the
market have increased to 8 percent.
Bonds Payable (€500,000 - €480,000) 20,000
Unrealized Holding Gain or Loss—Income 20,000
Fair Value Option
LO 7
37. 14-‹#›
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
14-‹#›
Off-balance-sheet financing is an attempt to borrow monies in
such a way to prevent recording the obligations.
Off-Balance-Sheet Financing
Different Forms:
Non-Consolidated Subsidiary
Special Purpose Entity (SPE)
Operating Leases
38. LO 8
14-‹#›
Describe the accounting for the extinguishment of non-current
liabilities.
Describe the accounting for the fair value option.
Explain the reporting of off-balance-sheet financing
arrangements.
Indicate how to present and analyze non-current liabilities.
After studying this chapter, you should be able to:
Non-Current Liabilities
14
LEARNING OBJECTIVES
Describe the formal procedures associated with issuing long-
term debt.
Identify various types of bond issues.
Describe the accounting valuation for bonds at date of issuance.
Apply the methods of bond discount and premium amortization.
Explain the accounting for long-term notes payable.
14-‹#›
Note disclosures generally indicate the nature of the liabilities,
maturity dates, interest rates, call provisions, conversion
privileges, restrictions imposed by the creditors, and assets
designated or pledged as security.
Fair value of the debt should be disclosed.
Must disclose future payments for sinking fund requirements
39. and maturity amounts of long-term debt during each of the next
five years.
Presentation and Analysis
Presentation of Non-Current Liabilities
LO 9
14-‹#›
Analysis of Non-Current Liabilities
One ratio that provides information about debt-paying ability
and long-run solvency is:
Total Liabilities
Total Assets
Debt to Assets
=
The higher the percentage of total liabilities to total assets, the
greater the risk that the company may be unable to meet its
maturing obligations.
Presentation and Analysis
LO 9
14-‹#›
A second ratio that provids information about debt-paying
ability and long-run solvency is:
Income before Income Taxes and Interest Expense
Interest Expense
Times Interest Earned
40. =
Indicates the company’s ability to meet interest payments as
they come due.
Analysis of Non-Current Liabilities
Presentation and Analysis
LO 9
14-‹#›
Illustration: Novartis has total liabilities of $54,997 million,
total assets of $124,216 million, interest expense of $724
million, income taxes of $1,625 million, and net income of
$9,618 million. We compute Novartis’s debt to assets and times
interest earned ratios as shown
Presentation and Analysis
ILLUSTRATION 14-28
Computation of Long-Term Debt Ratios for Novartis
LO 9
14-‹#›
41. LIABILITIES
U.S. GAAP and IFRS have similar definitions for liabilities. In
addition, the accounting for current liabilities is essentially the
same under both IFRS and U.S. GAAP. However, there are
substantial differences in terminology related to noncurrent
liabilities as well as some differences in the accounting for
various types of long-term debt transactions.
GLOBAL ACCOUNTING INSIGHTS
14-‹#›
Relevant Facts
Similarities
U.S. GAAP and IFRS have similar liability definitions. Both
also classify liabilities as current and non-current.
Much of the accounting for bonds and long-term notes is the
same under U.S. GAAP and IFRS.
Both U.S. GAAP and IFRS require the best estimate of a
probable loss. In U.S. GAAP, the minimum amount in a range is
used. Under IFRS, if a range of estimates is predicted and no
amount in the range is more likely than any other amount in the
range, the midpoint of the range is used to measure the liability.
Both U.S. GAAP and IFRS prohibit the recognition of liabilities
for future losses.
GLOBAL ACCOUNTING INSIGHTS
14-‹#›
42. Relevant Facts
Differences
Under U.S. GAAP, companies must classify a refinancing as
current only if it is completed before the financial statements
are issued. IFRS requires that the current portion of long-term
debt be classified as current unless an agreement to refinance on
a long-term basis is completed before the reporting date.
U.S. GAAP uses the term contingency in a different way than
IFRS. A contingency under U.S. GAAP may be reported as a
liability under certain situations. IFRS does not permit a
contingency to be recorded as a liability.
U.S. GAAP uses the term estimated liabilities to discuss various
liability items that have some uncertainty related to timing or
amount. IFRS generally uses the term provisions.
GLOBAL ACCOUNTING INSIGHTS
14-‹#›
Relevant Facts
Differences
U.S. GAAP and IFRS are similar in the treatment of
environmental liabilities. However, the recognition criteria for
environmental liabilities are more stringent under U.S. GAAP:
Environmental liabilities are not recognized unless there is a
present legal obligation and the fair value of the obligation can
be reasonably estimated.
U.S. GAAP uses the term troubled debt restructurings and
develops recognition rules related to this category. IFRS
generally assumes that all restructurings should be considered
43. extinguishments of debt.
GLOBAL ACCOUNTING INSIGHTS
14-‹#›
Relevant Facts
Differences
Under U.S. GAAP, companies are permitted to use the straight-
line method of amortization for bond discount or premium,
provided that the amount recorded is not materially different
than that resulting from effective-interest amortization.
However, the effective-interest method is preferred and is
generally used. Under IFRS, companies must use the effective-
interest method.
Under U.S. GAAP, companies record discounts and premiums in
separate accounts (see the About the Numbers section). Under
IFRS, companies do not use premium or discount accounts but
instead show the bond at its net amount.
GLOBAL ACCOUNTING INSIGHTS
14-‹#›
Relevant Facts
Differences
Under U.S. GAAP, bond issue costs are recorded as an asset.
Under IFRS, bond issue costs are netted against the carrying
44. amount of the bonds.
Under U.S. GAAP, losses on onerous contract are generally not
recognized unless addressed by industry- or transaction-specific
requirements. IFRS requires a liability and related expense or
cost be recognized when a contract is onerous.
GLOBAL ACCOUNTING INSIGHTS
14-‹#›
About The Numbers
GLOBAL ACCOUNTING INSIGHTS
Under IFRS, premiums and discounts are netted against the face
value of the bonds for recording purposes. Under U.S. GAAP,
discounts and premiums are recorded in separate accounts.
14-‹#›
On the Horizon
As indicated in Chapter 2, the IASB and FASB are working on a
conceptual framework project, part of which will examine the
definition of a liability. In addition, the two Boards are
attempting to clarify the accounting related to provisions and
related contingencies.
GLOBAL ACCOUNTING INSIGHTS
46. Market Rate 8% (PV for 3 periods at 8%)
Sheet1Principal$100,000x0.79383=$
79,383Interest8,000x2.57710=20,617Present value100,000Face
value100,000Discount$ 0
Principal$100,000x0.79383 =79,383$
Interest8,000 x2.57710 =20,617
Present value100,000
Face value100,000
Discount
0$
Chapter
14-14
Illustration:Three year bonds are issued at face value
of $100,000 on Jan. 1, 2011, with a stated interest rate
of 8%. Interest paid annually on Dec. 31. Calculate the
issue price of the bonds, market interest rate of 8%.
Principal$100,000x0.79383 =79,383$
Interest8,000 x2.57710 =20,617
Present value100,000
Face value100,000
Discount
0$
LO 3 Describe the accounting valuation for bonds at date of issu
ance.
Market Rate 8%
Market Rate 8%
(PV for 3 periods at 8%)
(PV for 3 periods at 8%)
Bonds Issued at Par
Bonds Issued at Par
Bonds Issued at Par
47. Chapter 14-*
Bonds Issued at Par
Illustration: Three year bonds are issued at face value of
$100,000 on Jan. 1, 2011, with a stated interest rate of 8%.
Interest paid annually on Dec. 31. Calculate the issue price of
the bonds, market interest rate of 8%.
LO 3 Describe the accounting valuation for bonds at date of
issuance.
Market Rate 8% (PV for 3 periods at 8%)
Sheet1Principal$100,000x0.79383=$
79,383Interest8,000x2.57710=20,617Present value100,000Face
value100,000Discount$ 0
Principal$100,000x0.79383 =79,383$
Interest8,000 x2.57710 =20,617
Present value100,000
Face value100,000
Discount
0$
Chapter 14-*
Bonds Issued at Par
Illustration: Three year bonds are issued at face value of
$100,000 on Jan. 1, 2011, with a stated interest rate of 8%.
Interest paid annually on Dec. 31. Calculate the issue price of
48. the bonds, market interest rate of 8%.
LO 3 Describe the accounting valuation for bonds at date of
issuance.
Market Rate 8% (PV for 3 periods at 8%)
Sheet1Principal$100,000x0.79383=$
79,383Interest8,000x2.57710=20,617Present value100,000Face
value100,000Discount$ 0
Principal$100,000x0.79383 =79,383$
Interest8,000 x2.57710 =20,617
Present value100,000
Face value100,000
Discount
0$
Chapter 14-*
Bonds Issued at Par
Illustration: Three year bonds are issued at face value of
$100,000 on Jan. 1, 2011, with a stated interest rate of 8%.
Interest paid annually on Dec. 31. Calculate the issue price of
the bonds, market interest rate of 8%.
LO 3 Describe the accounting valuation for bonds at date of
issuance.
Market Rate 8% (PV for 3 periods at 8%)
Sheet1Principal$100,000x0.79383=$
49. 79,383Interest8,000x2.57710=20,617Present value100,000Face
value100,000Discount$ 0
Principal$100,000x0.79383 =79,383$
Interest8,000 x2.57710 =20,617
Present value100,000
Face value100,000
Discount
0$
13-‹#›
PREVIEW OF CHAPTER
Intermediate Accounting
IFRS 2nd Edition
Kieso, Weygandt, and Warfield
13
13-‹#›
Explain the accounting for different types of provisions.
Identify the criteria used to account for and disclose contingent
liabilities and assets.
Indicate how to present and analyze liability-related
information.
After studying this chapter, you should be able to:
Current Liabilities, Provisions, and Contingencies
13
50. LEARNING OBJECTIVES
Describe the nature, type, and valuation of current liabilities.
Explain the classification issues of short-term debt expected to
be refinanced.
Identify types of employee-related liabilities.
13-‹#›
Three essential characteristics:
Present obligation.
Arises from past events.
Results in an outflow of resources (cash, goods, services).
CURRENT LIABILITIES
LO 1
13-‹#›
A current liability is reported if one of two conditions exists:
Liability is expected to be settled within its normal operating
cycle; or
Liability is expected to be settled within 12 months after the
reporting date.
The operating cycle is the period of time elapsing between the
acquisition of goods and services and the final cash realization
resulting from sales and subsequent collections.
CURRENT LIABILITIES
LO 1
51. 13-‹#›
Typical Current Liabilities:
Accounts payable.
Notes payable.
Current maturities of long-term debt.
Short-term obligations expected to be refinanced.
Dividends payable.
Customer advances and deposits.
Unearned revenues.
Sales and value-added taxes payable.
Income taxes payable.
Employee-related liabilities.
CURRENT LIABILITIES
LO 1
13-‹#›
Accounts Payable (trade accounts payable)
Balances owed to others for goods, supplies, or services
purchased on open account.
Time lag between the receipt of services or acquisition of title
to assets and the payment for them.
Terms of the sale (e.g., 2/10, n/30 or 1/10, E.O.M.) usually state
period of extended credit, commonly 30 to 60 days.
CURRENT LIABILITIES
LO 1
13-‹#›
52. Notes Payable
Written promises to pay a certain sum of money on a specified
future date.
Arise from purchases, financing, or other transactions.
Notes classified as short-term or long-term.
Notes may be interest-bearing or zero-interest-bearing.
CURRENT LIABILITIES
LO 1
13-‹#›
Illustration: Castle National Bank agrees to lend €100,000 on
March 1, 2015, to Landscape Co. if Landscape signs a
€100,000, 6 percent, four-month note. Landscape records the
cash received on March 1 as follows:
Cash 100,000
Notes Payable 100,000
Interest-Bearing Note Issued
CURRENT LIABILITIES
LO 1
13-‹#›
If Landscape prepares financial statements semiannually, it
makes the following adjusting entry to recognize interest
expense and interest payable at June 30, 2015:
Interest Expense 2,000
Interest Payable 2,000
53. (€100,000 x 6% x 4/12) = €2,000
Interest calculation =
Interest-Bearing Note Issued
LO 1
13-‹#›
At maturity (July 1, 2016), Landscape records payment of the
note and accrued interest as follows.
Notes Payable100,000
Interest Payable 2,000
Cash 102,000
Interest-Bearing Note Issued
LO 1
13-‹#›
Illustration: On March 1, Landscape issues a €102,000, four-
month, zero-interest-bearing note to Castle National Bank. The
present value of the note is €100,000. Landscape records this
transaction as follows.
Cash100,000
Notes Payable 100,000
Zero-Interest-Bearing Note Issued
CURRENT LIABILITIES
LO 1
13-‹#›
54. If Landscape prepares financial statements semiannually, it
makes the following adjusting entry to recognize interest
expense and the increase in the note payable of €2,000 at June
30.
Interest Expense2,000
Notes Payable 2,000
At maturity (July 1), Landscape must pay the note, as follows.
Notes Payable102,000
Cash102,000
Zero-Interest-Bearing Note Issued
LO 1
13-‹#›
E13-2: (Accounts and Notes Payable) The following are
selected 2015 transactions of Darby Corporation.
Sept. 1 - Purchased inventory from Orion Company on account
for $50,000. Darby records purchases gross and uses a periodic
inventory system.
Oct. 1 - Issued a $50,000, 12-month, 8% note to Orion in
payment of account.
Oct. 1 - Borrowed $75,000 from the Shore Bank by signing a
12-month, zero-interest-bearing $81,000 note.
Prepare journal entries for the selected transactions.
CURRENT LIABILITIES
LO 1
13-‹#›
Sept. 1 - Purchased inventory from Orion Company on account
for $50,000. Darby records purchases gross and uses a periodic
inventory system.
55. Sept. 1Purchases 50,000
Accounts Payable50,000
CURRENT LIABILITIES
LO 1
13-‹#›
Oct. 1Accounts Payable 50,000
Notes Payable50,000
Interest calculation =
Oct. 1 - Issued a $50,000, 12-month, 8% note to Orion in
payment of account.
Dec. 31Interest Expense1,000
Interest Payable1,000
($50,000 x 8% x 3/12) = $1,000
CURRENT LIABILITIES
LO 1
13-‹#›
Dec. 31Interest Expense1,500
Notes Payable1,500
Oct. 1Cash 75,000
Notes Payable75,000
($6,000 x 3/12) = $1,500
Oct. 1 - Borrowed $75,000 from the Shore Bank by signing a
12-month, zero-interest-bearing $81,000 note.
Interest calculation =
CURRENT LIABILITIES
LO 1
13-‹#›
56. Portion of bonds, mortgage notes, and other long-term
indebtedness that matures within the next fiscal year.
Exclude long-term debts maturing currently if they are to be:
Current Maturities of Long-Term Debt
Retired by assets accumulated that have not been shown as
current assets,
Refinanced, or retired from the proceeds of a new debt issue, or
Converted into ordinary shares.
CURRENT LIABILITIES
LO 1
13-‹#›
Explain the accounting for different types of provisions.
Identify the criteria used to account for and disclose contingent
liabilities and assets.
Indicate how to present and analyze liability-related
information.
After studying this chapter, you should be able to:
Current Liabilities, Provisions, and Contingencies
13
LEARNING OBJECTIVES
Describe the nature, type, and valuation of current liabilities.
Explain the classification issues of short-term debt expected to
be refinanced.
Identify types of employee-related liabilities.
13-‹#›
57. Short-Term Obligations Expected to Be Refinanced
Exclude from current liabilities if both of the following
conditions are met:
Must intend to refinance the obligation on a long-term basis.
Must have an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
CURRENT LIABILITIES
LO 2
13-‹#›
E13-4 (Refinancing of Short-Term Debt): The CFO for Yong
Corporation is discussing with the company’s chief executive
officer issues related to the company’s short-term obligations.
Presently, both the current ratio and the acid-test ratio for the
company are quite low, and the chief executive officer is
wondering if any of these short-term obligations could be
reclassified as long-term. The financial reporting date is
December 31, 2014. Two short-term obligations were discussed,
and the following action was taken by the CFO.
Instructions: Indicate how these transactions should be reported
at Dec. 31, 2014, on Yongs’ statement of financial position.
CURRENT LIABILITIES
LO 2
13-‹#›
Short-Term Obligation A: Yong has a $50,000 short-term
obligation due on March 1, 2015. The CFO discussed with its
lender whether the payment could be extended to March 1,
2017, provided Yong agrees to provide additional collateral. An
58. agreement is reached on February 1, 2015, to change the loan
terms to extend the obligation’s maturity to March 1, 2017. The
financial statements are authorized for issuance on April 1,
2015.
Liability of $50,000
Dec. 31, 2014
Statement Issuance
Apr. 1, 2015
Liability due for payment
Mar. 1, 2015
Refinance completed
Feb. 1, 2015
CURRENT LIABILITIES
LO 2
13-‹#›
Current Liability of $50,000
Dec. 31, 2015
Since the agreement was not in place as of the reporting date
(December 31, 2015), the obligation should be reported as a
current liability.
CURRENT LIABILITIES
Short-Term Obligation A: Yong has a $50,000 short-term
obligation due on March 1, 2015. The CFO discussed with its
lender whether the payment could be extended to March 1,
2017, provided Yong agrees to provide additional collateral. An
59. agreement is reached on February 1, 2015, to change the loan
terms to extend the obligation’s maturity to March 1, 2017. The
financial statements are authorized for issuance on April 1,
2015.
LO 2
13-‹#›
Refinance completed
Dec. 18, 2014
Statement Issuance
Mar. 31, 2015
Liability due for payment
Feb. 15, 2015
Liability of $120,000
Dec. 31, 2014
CURRENT LIABILITIES
Short-Term Obligation B: Yong also has another short-term
obligation of $120,000 due on February 15, 2015. In its
discussion with the lender, the lender agrees to extend the
maturity date to February 1, 2016. The agreement is signed on
December 18, 2014. The financial statements are authorized for
issuance on March 31, 2015.
LO 2
13-‹#›
Refinance completed
60. Dec. 18, 2014
Non-Current Liability of $120,000
Dec. 31, 2014
Since the agreement was in place as of the reporting date
(December 31, 2014), the obligation is reported as a non-current
liability.
CURRENT LIABILITIES
Short-Term Obligation B: Yong also has another short-term
obligation of $120,000 due on February 15, 2015. In its
discussion with the lender, the lender agrees to extend the
maturity date to February 1, 2016. The agreement is signed on
December 18, 2014. The financial statements are authorized for
issuance on March 31, 2015.
LO 2
13-‹#›
Dividends Payable
Amount owed by a corporation to its stockholders as a result of
board of directors’ authorization.
Generally paid within three months.
Undeclared dividends on cumulative preference shares not
recognized as a liability.
Dividends payable in the form of additional shares are not
recognized as a liability.
Reported in equity.
CURRENT LIABILITIES
LO 2
13-‹#›
61. Customer Advances and Deposits
Returnable cash deposits received from customers and
employees.
May be classified as current or non-current liabilities.
CURRENT LIABILITIES
LO 2
13-‹#›
Payment received before providing goods or performing
services.
Unearned Revenues
ILLUSTRATION 13-2
Unearned and Earned Revenue Accounts
CURRENT LIABILITIES
LO 2
13-‹#›
BE13-6: Sports Pro Magazine sold 12,000 annual subscriptions
on August 1, 2015, for €18 each. Prepare Sports Pro’s August 1,
2015, journal entry and the December 31, 2015, annual
adjusting entry.
Aug. 1Cash 216,000
Unearned Revenue216,000
(12,000 x €18)
Dec. 31 Unearned Revenue 90,000
Subscription Revenue90,000
62. (€216,000 x 5/12 = €90,000)
CURRENT LIABILITIES
LO 2
13-‹#›
Consumption taxes are generally either
a sales tax or
a value-added tax (VAT).
Purpose is to generate revenue for the government.
The two systems use different methods to accomplish this
objective.
Sales and Value-Added Taxes Payable
CURRENT LIABILITIES
LO 2
13-‹#›
Illustration: Halo Supermarket sells loaves of bread to
consumers on a given day for €2,400. Assuming a sales tax rate
of 10 percent, Halo Supermarket makes the following entry to
record the sale.
Sales Taxes Payable
Cash 2,640
Sales Revenue 2,400
Sales Taxes Payable 240
LO 2
13-‹#›
63. Illustration: The VAT is collected every time a business
purchases products from another business in the product’s
supply chain. To illustrate,
Hill Farms Wheat Company grows wheat and sells it to
Sunshine Baking for €1,000. Hill Farms Wheat makes the
following entry to record the sale, assuming the VAT is 10
percent.
Value-Added Taxes Payable
Cash 1,100
Sales Revenue 1,000
Value-Added Taxes Payable 100
LO 2
13-‹#›
Sunshine Baking makes loaves of bread from this wheat and
sells it to Halo Supermarket for €2,000. Sunshine Baking makes
the following entry to record the sale, assuming the VAT is 10
percent.
Value-Added Taxes Payable
Cash 2,200
Sales Revenue 2,000
Value-Added Taxes Payable 200
Sunshine Baking then remits €100 to the government, not €200.
The reason: Sunshine Baking has already paid €100 to Hill
Farms Wheat.
LO 2
13-‹#›
64. Halo Supermarket sells the loaves of bread to consumers for
€2,400. Halo Supermarket makes the following entry to record
the sale, assuming the VAT is 10 percent.
Value-Added Taxes Payable
Cash 2,640
Sales Revenue 2,400
Value-Added Taxes Payable 240
Halo Supermarket then sends only €40 to the tax authority as it
deducts the €200 VAT already paid to Sunshine Baking.
LO 2
13-‹#›
Income Tax Payable
Businesses must prepare an income tax return and compute the
income tax payable.
Taxes payable are a current liability.
Corporations must make periodic tax payments.
Differences between taxable income and accounting income
sometimes occur (Chapter 19).
CURRENT LIABILITIES
LO 2
13-‹#›
Explain the accounting for different types of provisions.
Identify the criteria used to account for and disclose contingent
liabilities and assets.
Indicate how to present and analyze liability-related
65. information.
After studying this chapter, you should be able to:
Current Liabilities, Provisions, and Contingencies
13
LEARNING OBJECTIVES
Describe the nature, type, and valuation of current liabilities.
Explain the classification issues of short-term debt expected to
be refinanced.
Identify types of employee-related liabilities.
13-‹#›
Employee-Related Liabilities
Amounts owed to employees for salaries or wages are reported
as a current liability.
Current liabilities may include:
Payroll deductions.
Compensated absences.
Bonuses.
CURRENT LIABILITIES
LO 3
13-‹#›
Payroll Deductions
Taxes:
Social Security Taxes
66. Income Tax Withholding
ILLUSTRATION 13-4
Summary of Payroll Liabilities
Employee-Related Liabilities
LO 3
13-‹#›
Illustration: Assume a weekly payroll of $10,000 entirely
subject to Social Security taxes (8%), with income tax
withholding of $1,320 and union dues of $88 deducted. The
company records the wages and salaries paid and the employee
payroll deductions as follows.
Wages and Salaries Expense 10,000
Withholding Taxes Payable1,320
Social Security Taxes Payable800
Union Dues Payable88
Cash7,792
Employee-Related Liabilities
LO 3
13-‹#›
Illustration: Assume a weekly payroll of $10,000 entirely
subject to Social Security taxes (8%), with income tax
withholding of $1,320 and union dues of $88 deducted. The
company records the employer payroll taxes as follows.
Payroll Tax Expense 800
Social Security Taxes Payable800
The employer must remit to the government its share of Social
Security tax along with the amount of Social Security tax
deducted from each employee’s gross compensation.
67. Employee-Related Liabilities
LO 3
13-‹#›
Compensated Absences
Paid absences for vacation, illness and maternity, paternity, and
jury leaves.
Vested rights - employer has an obligation to make payment to
an employee even after terminating his or her employment.
Accumulated rights - employees can carry forward to future
periods if not used in the period in which earned.
Non-accumulating rights - do not carry forward; they lapse if
not used.
Employee-Related Liabilities
LO 3
13-‹#›
Illustration: Amutron Inc. began operations on January 1, 2015.
The company employs 10 individuals and pays each €480 per
week. Employees earned 20 unused vacation weeks in 2015. In
2016, the employees used the vacation weeks, but now they
each earn €540 per week. Amutron accrues the accumulated
vacation pay on December 31, 2015, as follows.
Salaries and Wages Expense 9,600
Salaries and Wages Payable9,600
In 2016, it records the payment of vacation pay as follows.
Salaries and Wages Payable9,600
Salaries and Wages Expense 1,200
Cash10,800
68. Employee-Related Liabilities
LO 3
13-‹#›
Payments to certain or all employees in addition to their regular
salaries or wages.
Bonuses paid are an operating expense.
Unpaid bonuses should be reported as a current liability.
Profit-Sharing and Bonus Plans
Employee-Related Liabilities
LO 3
13-‹#›
Explain the accounting for different types of provisions.
Identify the criteria used to account for and disclose contingent
liabilities and assets.
Indicate how to present and analyze liability-related
information.
After studying this chapter, you should be able to:
Current Liabilities, Provisions, and Contingencies
13
LEARNING OBJECTIVES
Describe the nature, type, and valuation of current liabilities.
Explain the classification issues of short-term debt expected to
be refinanced.
Identify types of employee-related liabilities.
13-‹#›
69. Provision is a liability of uncertain timing or amount.
Reported either as current or non-current liability.
Common types are
Obligations related to litigation.
Warrantees or product guarantees.
Business restructurings.
Environmental damage.
Uncertainty about the timing or amount of the future
expenditure required to settle the obligation.
PROVISIONS
LO 4
13-‹#›
Companies accrue an expense and related liability for a
provision only if the following three conditions are met:
Company has a present obligation (legal or constructive) as a
result of a past event;
Probable that an outflow of resources will be required to settle
the obligation; and
A reliable estimate can be made.
Recognition of a Provision
LO 4
13-‹#›
70. A reliable estimate of the amount of the obligation can be
determined.
Recognition Examples
Recognition of a Provision
ILLUSTRATION 13-5
Recognition of a Provision—Warranty
LO 4
13-‹#›
Constructive obligation is an obligation that derives from a
company’s actions where:
By an established pattern of past practice, published policies, or
a sufficiently specific current statement, the company has
indicated to other parties that it will accept certain
responsibilities; and
As a result, the company has created a valid expectation on the
part of those other parties that it will discharge those
responsibilities.
Recognition Examples
LO 4
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A reliable estimate of the amount of the obligation can be
determined.
Recognition Examples
71. ILLUSTRATION 13-6
Recognition of a Provision—Refunds
LO 4
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A reliable estimate of the amount of the obligation can be
determined.
Recognition Examples
ILLUSTRATION 13-7
Recognition of a Provision—Lawsuit
LO 4
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How does a company determine the amount to report for a
provision?
IFRS:
Amount recognized should be the best estimate of the
expenditure required to settle the present obligation.
Best estimate represents the amount that a company would pay
to settle the obligation at the statement of financial position
date.
Measurement of Provisions
LO 4
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72. Management must use judgment, based on past or similar
transactions, discussions with experts, and any other pertinent
information.
Measurement Examples
Toyota warranties. Toyota might determine that 80 percent of
its cars will not have any warranty cost, 12 percent will have
substantial costs, and 8 percent will have a much smaller cost.
In this case, by weighting all the possible outcomes by their
associated probabilities, Toyota arrives at an expected value for
its warranty liability.
Measurement of Provisions
LO 4
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Carrefour refunds. Carrefour sells many items at varying selling
prices. Refunds to customers for products sold may be viewed
as a continuous range of refunds, with each point in the range
having the same probability of occurrence. In this case, the
midpoint in the range can be used as the basis for measuring the
amount of the refunds.
Measurement of Provisions
Management must use judgment, based on past or similar
transactions, discussions with experts, and any other pertinent
information.
Measurement Examples
LO 4
73. 13-‹#›
Measurement of the liability should consider the time value of
money, if material. Future events that may have an impact on
the measurement of the costs should be considered.
Novartis lawsuit. Large companies like Novartis are involved
in numerous litigation issues related to their products. Where a
single obligation such as a lawsuit is being measured, the most
likely outcome of the lawsuit may be the best estimate of the
liability.
Measurement of Provisions
Measurement Examples
LO 4
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Common Types:
Lawsuits
Warranties
Consideration payable
Environmental
Onerous contracts
Restructuring
IFRS requires extensive disclosure related to provisions in the
notes to the financial statements. Companies do not record or
report in the notes general risk contingencies inherent in
business operations (e.g., the possibility of war, strike,
uninsurable catastrophes, or a business recession).
Common Types of Provisions
74. LO 4
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Litigation Provisions
Companies must consider the following in determining whether
to record a liability with respect to pending or threatened
litigation and actual or possible claims and assessments.
The time period in which the underlying cause of action
occurred.
The probability of an unfavorable outcome.
Ability to make a reasonable estimate of the amount of loss.
Common Types of Provisions
LO 4
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With respect to unfiled suits and unasserted claims and
assessments, a company must determine
the degree of probability that a suit may be filed or a claim or
assessment may be asserted, and
the probability of an unfavorable outcome.
If both are probable, if the loss is reasonably estimable, and if
the cause for action is dated on or before the date of the
financial statements, then the company should accrue the
liability.
Litigation Provisions
LO 4
75. 13-‹#›
BE13-12: Scorcese Inc. is involved in a lawsuit at December
31, 2015. (a) Prepare the December 31 entry assuming it is
probable that Scorcese will be liable for ₺900,000 as a result of
this suit. (b) Prepare the December 31 entry, if any, assuming it
is not probable that Scorcese will be liable for any payment as a
result of this suit.
(a)Lawsuit Loss 900,000
Lawsuit Liability900,000
(b)No entry is necessary. The loss is not accrued because it is
not probable that a liability has been incurred at 12/31/15.
Litigation Provisions
LO 4
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Warranty Provisions
Promise made by a seller to a buyer to make good on a
deficiency of quantity, quality, or performance in a product.
If it is probable that customers will make warranty claims and a
company can reasonably estimate the costs involved, the
company must record an expense.
Common Types of Provisions
LO 4
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Companies often provide one of two types of warranties to
76. customers:
Assurance-Type Warranty
A quality guarantee that the good or service is free from defects
at the point of sale.
Obligations should be expensed in the period the goods are
provided or services performed (in other words, at the point of
sale).
Company should record a warranty liability.
Warranty Provisions
LO 4
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Facts: Denson Machinery Company begins production of a new
machine in July 2015 and sells 100 of these machines for $5,000
cash by year-end. Each machine is under warranty for one year.
Denson estimates, based on past experience with similar
machines, that the warranty cost will average $200 per unit.
Further, as a result of parts replacements and services
performed in compliance with machinery warranties, it incurs
$4,000 in warranty costs in 2015 and $16,000 in 2016.
Question: What are the journal entries for the sale and the
related warranty costs for 2015 and 2016?
Assurance-Type Warranty
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77. Solution
: For the sale of the machines and related warranty costs in
2015 the entry is as follows.
1. To recognize sales of machines and accrual of warranty
liability:
July–December 2015
Assurance-Type Warranty
Cash 500,000
Warranty Expense 20,000
Warranty Liability 20,000
Sales Revenue 500,000
LO 4
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