Exam 10: Reporting and Interpreting Bond Securities

Cathy Company reported the following summary amounts for its second year ended December 31, 20B: Income tax rate, 40% Give the entry to record income tax for 20B.

Mild Company borrowed $5,000 on an 8% (annual rate) interest-bearing note payable on March 1, 20C. The maturity date of the note (and payment of all interest) is September 1, 20D. The accounting period ends December 31. Give the entry for each of the following dates. Assume simple interest. Round to the nearest dollar.

The following data is available for Toys 4 U for the years 2009 through 2012: 1. Calculate the trade payables turnover ratio for the following years: 2. Calculate the number of days it is taking Toys 4 U to pay their vendors: 3. Explain whether Toys 4 U is doing a better job at paying their vendors in a timely manner.

Carly Design Inc. received its annual property tax bill for $8,400 in January. It was paid when due on March 31. Carly Design's year end is Dec 31. The Dec 31 account balances should be

Payroll liabilities include the employer's share of CPP contributions and EI premiums.

GST (goods and services tax) collected by a retailer are expenses

A current liability must be paid out of current earnings.

Bison Corp. issues a 5 year 8%, $60,000 note payable on March 1. The terms of the note include monthly blended principal and interest payments of $1,217. The entry to record the second instalment payment will show a:

A company that sells primarily on a cash basis could support a lower quick ratio because their cash inflow is faster than a company selling on credit.

Liquidity ratios measure a company's

The trade payables turnover ratio can indicate if a company is experiencing cash flow problems.

An accrued expense arises because an expense item has been prepaid, but the related expense has not been incurred as yet.

On January 1, 2013, Osler Limited, a calendar-year company, issued $160,000 of notes payable, of which $40,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2013, is

A contingent liability is recorded in the accounting records

Interest rates on notes are usually stated as a(n)

If a company intends to refinance a liability that is due within one year, that liability should not be classified as a current liability.

Which of the following is correct with respect to a contingent liability that is "reasonably possible" but "cannot reasonably be estimated"?

Match the liabilities with their usual classification on the statement of financial position by entering the appropriate letters in the spaces. Usual Classification A. Current liability B. Long-term liability C. Current or long-term liability D. None of the above Liabilities

The current portion of long-term debt should be

G Co and A Co are both in the biotechnology industry. In 2013, G Co reported a trade payables turnover of 7.71 and A Co reported a ratio of 3.06. Which of the following is an incorrect reason for the difference in ratios?