Exam 10: Reporting and Interpreting Bond Securities

On September 1, Linwell Corp. borrowed $70,000 from the Highland Bank for five months at 9%. Interest is due at maturity. The company's year-end is December 31, at which time any outstanding interest was accrued. The entry to record payment of the note and accrued interest on February 1, the due date, is:

Which of the following method of ordering is normally used to present current liabilities on the statement of financial position?

A cash register tape shows cash sales of $2,000 and provincial sales tax (PST) of $120. The journal entry to record this information is

A note payable must always be paid before an account payable.

In 2013, Toys 4 U reported inventory of $1,902 million and trade payables of $1,415 million. In 2012, the company reported inventory of $2,464 million and trade payables of $1,280 million. What was the effect on the 2013 cash flow from operating activities?

The amount of sales tax collected by a retail store when making sales is

Jake Company is involved in a lawsuit. The liability which could arise as a result of this lawsuit should be recorded on the books if the probability of Jake owing money as a result of the lawsuit is which of the following?

The amount of salary expense that a company records for a pay period will usually be less than the amount of salary payable that it records.

Current liabilities are short-term obligations that will be paid within the current operating cycle of the business or within two years of the statement of financial position date, whichever is longer.

How should the amount of federal income tax that is withheld from employees' paychecks by the employer be recorded?

Interest expense on a note payable is only recorded at maturity.

The following data were provided by the detailed payroll records of Journey Corporation for the month of March 20A: Income taxes at an average 7.65% rate (no employee has reached the maximum) Required: 1. Give the March 31, 20A entry to record the payroll and related employee deductions 2. Give the March 31, 20A entry to record the employer's payroll income tax expense

Most notes are not interest bearing.

A customer paid a total of $84,000 for a purchase, including 5% PST (provincial sales tax). What was the PST amount?

Alamo Autoworks, Inc. is involved in a lawsuit. Their lawyers state that it is probable that the jury will find in favour of the plaintiff and Alamo will owe two million dollars. Even though the lawsuit is not yet settled, Alamo should record a liability in the statement of financial position and which of the following?

A contingent liability that has a remote probability of occurrence must be disclosed in a note to the financial statements.

Future income tax obligations should be reported on which of the following?

The federal government requires which of the following?

In 2013, P Co reported a trade payables turnover ratio of 2.49 and C Co reported a turnover ratio of 1.74 for that same year. Which of the following statements is true?

A commitment is a contractual agreement to enter into a transaction with another party in the future.