- This topic has 2 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
I am unable to figure out the number of ‘payments’ withing one year in the following:
X takes out a loan of $60,000 on 30 Sep 2010 and has agreed to repay $2000 of capital per month starting on 30 OCT 10. However, X actually made the first payment on 12 Nov 10!
What’s the outstanding capital reported on SOFP on 31 Oct 10?
We have to calculate the CL and NCL basically… but, my issue is whether or not we include the payment that was SUPPOSED to happen on 31 Oct 10 as part of CL?
Since it was on 12 Nov 10, does this mean 12 payments will NOT be made on the last day of the 12 months year ended 31 Oct 11? (Current L) ie only 11 will be made?
Starting from 12 Nov, then 31 Dec and so on… These will make 11 up to 31 Oct…Or does, on the reporting date, the ‘not-made’ payment become accrued?
I thought abt it – Would you agree with this route?
1) Payments to be made on last day of every month from 31 Oct onwards.
2) So on 31 Oct, for the following year from 1 Nov 10 to 31 Oct 11, there must be 12 payments of 2000 each. (Current Liability)
3) Normally, CL would be 24000 on 31 Oct 10Since payment not made on 31 Oct 10 (Not related at all to the 12 payments to occur):
1) Accrued ie 2000 CL made at year-end
2) Add this to the normal (expected) payments to occur next year = 26000
3) Rest in NCL ie 34000PS: On another note, for Current liabilities, when we say WITHIN one year, do we include the last day of the year? Eg at 31 Dec X1, all loan payments to be made on last date of month, does it mean from 1 Jan X2 to 31 DEC X2, (including payment on last date), there will be 12 payments (CL)?
Thank you for your time.
At 31 October 2010 there is in total 60,000 owing (because nothing has been repaid as at that date).
The payment that should have been made on 30 October is certainly a current liability, as are the 12 payments due during the following year.
So the total current liability is 26,000, and the rest (34000) is a non-current liability.And yes – within a year includes the last day of the year.
- You must be logged in to reply to this topic.