PROBLEM 1

A
1 Issue price of BP
BP w/out conversion price
Share premium-conv priv
Jan

1 Cash
Discount on Amortization
Bond Payable
Share Premium - conv priv
2 Date
Jan 1, 2014
Dec 31, 2014

Dec

2,625,000
(2,350,000)
275,000
2,625,000
150,000
2,500,000
275,000
IE

IP
329,000

31 Interest Expense
Discount on Amortization
Cash

329,000

31 Bond Payable
Share Premium - conv priv
Discount on Amortization
Ordinary Share Capital
Ordinary Share Premium

2,500,000
275,000

3 Bonds payable (5 yrs, 12%, semi)

Share warrants
Issued at 120

5 Cash
Share warrants outstanding
Ordinary Share Capital
Ordinary Share Premium

300,000

29,000

29,000
300,000

121,000
2,500,000
154,000
4,000,000
8000, P100-par for P150

FV of BP & Warrants (4M * 1.20)

CV of Bonds Payable
Share warrants outstanding
4 Date
Jan 1, 2014
June 31, 2014
Dec 31, 2014

Amortization

4,800,000
(4,292,800)
507,200
IE

IP
214,640
213,372

Amortization
240,000
240,000

1,200,000
507,200
800,000
907,200

25,360
26,628
51,988

Discount on BP CV of BP
150,000
2,350,000
121,000
2,379,000

Premium on BP CV of BP
292,800
4,292,800
267,440
4,267,440
240,812
4,240,812

1 PV of Principal
PV of Interest
PV of BP

2 Interest on BP
Notes Payable
Apr 1, 2014
July 1, 2014
Oct 1, 2014
Jan 1, 2015
Interest on NP
Estimated warranties
Trade payables
Payroll related items
Miscellaneous accruals
Cash Dividends
Total current liabilities

3,118,000
5,734,960
8,852,960
250,000
400,000
600,000
300,000
300,000

3 Bond Payable
Notes Payable
Total noncurrent liabilities
Date
July 1, 2012
Jan 1, 2013
July 1, 2013
Jan 1, 2014
Mar 31,2014
July 1, 2014
Jan 1, 2015
July 1, 2015
Jan 1, 2016
July 1, 2016
Jan 1, 2017
July 1, 2017
Jan 1, 2018
July 1, 2018
Jan 1, 2019
July 1, 2019
Jan 1, 2020
July 1, 2020
Jan 1, 2021
July 1, 2021
Jan 1, 2022
July 1, 2022

1,600,000
600,000
342,000
740,000
404,000
150,000
1,200,000
5,286,000

8,970,784
5,400,000
14,370,784
IE

IP
531,178
533,048
535,031
268,567
268,567
539,361
541,723
544,226
546,880
549,692
552,674
555,834
559,184
562,735
566,500
570,490
574,719
579,202
583,954
588,991
594,331

Amortization
500,000
500,000
500,000
250,000
250,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000

31,178
33,048
35,031
18,567
18,567
39,361
41,723
44,226
46,880
49,692
52,674
55,834
59,184
62,735
66,500
70,490
74,719
79,202
83,954
88,991
94,484

Discount on BP CV of BP
1,147,040
8,852,960
1,115,862
8,884,138
1,082,814
8,917,186
1,047,783
8,952,217
1,029,216
8,970,784
1,010,650
8,989,350
971,289
9,028,711
929,566
9,070,434
885,340
9,114,660
838,461
9,161,539
788,768
9,211,232
736,094
9,263,906
680,260
9,319,740
621,076
9,378,924
558,340
9,441,660
491,841
9,508,159
421,351
9,578,649
346,632
9,653,368
267,430
9,732,570
183,476
9,816,524
94,484
9,905,516
10,000,000

1 Date
Jan 1, 2013
July 1, 2013
Jan 1, 2014
July 1, 2014
Jan 1, 2015
July 1, 2015
Jan 1, 2016
July 1, 2016
Jan 1, 2017
July 1, 2017
Jan 1, 2018
July 1, 2018
Jan 1, 2019
July 1, 2019
Jan 1, 2020
July 1, 2020
Jan 1, 2021
July 1, 2021
Jan 1, 2022
July 1, 2022
Jan 1, 2023
Carrying value of BP - Dec 31, 2014
(1,151,583 * 800/1000)

2 Cash Paid
Interest Expense
Redemption price
CV of bonds redeemed
Loss on Bond Redemption

3 Accrued Interest - Dec 31, 2014

4 Jan. 1 - June 30
July 1 - Dec 31
Bond Interest Expense - Dec 31, 2014

IE

IP
70,323
70,042
69,745
69,429
69,095
68,741
68,365
67,967
67,545
67,098
66,624
66,121
65,588
65,024
64,425
63,790
63,118
62,405
61,649
60,848
921,266

265,000
(15,000)
250,000
(230,316)
19,684
60,000
69,745
69,429
139,174

Amortization
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000
75,000

4,677
4,958
5,255
5,571
5,905
6,259
6,635
7,033
7,455
7,902
8,376
8,879
9,412
9,976
10,575
11,210
11,882
12,595
13,351
14,136

Premium on BP CV of BP
172,044
1,172,044
167,367
1,167,367
162,409
1,162,409
157,153
1,157,153
151,582
1,151,582
145,677
1,145,677
139,418
1,139,418
132,783
1,132,783
125,750
1,125,750
118,295
1,118,295
110,393
1,110,393
102,016
1,102,016
93,137
1,093,137
83,725
1,083,725
73,749
1,073,749
63,174
1,063,174
51,964
1,051,964
40,082
1,040,082
27,487
1,027,487
14,136
1,014,136
1,000,000

1 Warranty Expense

216,000

2 Estimated Liability, beg

Warranty Expense
Actual Warranty Costs
Estimated Liability, end

3 Premium Expense

4 Inventory, beg
Purchased CD players
CD players redeemed
Inventory, end

79,900
442,000
(408,000)
113,900

5 Estimated premium claims outs, beg

Premiums expense
Actual redemption
Estimated premium claims outs, end

89,600
151,200
(168,000)
72,800

272,000
216,000
(328,000)
160,000
151,200