Exam 10: Reporting and Interpreting Bond Securities

In the recognition of revenues and expenses, temporary and permanent differences between the financial statements and the tax return will result in a Future Income Tax Asset.

Current liabilities are expected to be paid within one year.

Warner Company borrowed $38,000 on a 12% one-year, interest bearing note dated November 1, 20A. The annual accounting period ends on December 31. Give journal entries on the following dates: A. November 1, 20A B. December 31, 20A C. October 31, 20B

When a company increases trade payables from one year to the next, what is the effect on cash flows?

A company whose current liabilities exceed its current assets may have a liquidity problem.

Goodman Company borrowed $100,000 cash on September 1, 20B, and signed a one-year, 12%, interest-bearing note payable. What would be the required adjusting entry at the end of the accounting period, December 31, 20B?

In 2013, C Co reported a trade payables turnover ratio of 1.85 and a current ratio of 0.66. Their statement of financial position shows $2.1 billion in marketable securities not included in their current assets and cash flow from operations. Which of the following interpretations is most likely?

In 2013, P Co reported an increase in trade receivables of $303 million, and an increase in inventory of $284 million. They also experienced an increase in short-term borrowings of $3,921 million and an increase in trade payables of $253 million. Calculate the net cash effect of these changes.

Site Company had the following account balances related to payroll at the end of the period: Without considering any employer payroll taxes, Site would record Salaries Payable for the pay period amounting to which of the following?

Use the following financial statement information: 1. Calculate the following:

Company P had pretax profit of $30,000 in 20A and $34,000 in 20B. A revenue of $2,000 was included correctly on the 20A income statement and was properly reported on the 20B income tax return. The corporate income tax rate was 25%. Give the entries relating to the incurrence of the tax liability for 20A and 20B: 20A: 20B:

Changes in trade payables and accrued liabilities affect cash flows from operating activities.

Shirlen Company has the following partial list of account balances at year end: Required: A. Determine the amount of working capital. B. Assume that cash is used to pay the balance due on trade payables. Compute the new amount of working capital. C. Compute the trade payables turnover ratio.

In 2013, Toys 4 U had a trade payables turnover ratio of 6.08; in 2012, 5.87; and 5.45 in 2011. Which statement is true about what the ratios indicate?

The Canada Pension Plan contribution is a matching contribution with a portion paid by both the employer and the employee.

Situations which require that future income tax be reported involve a difference that is called which of the following?

The trade payables turnover ratio shows how quickly management is paying its trade creditors and is considered to be a measure of liquidity.

At the end of the annual accounting period, the adjusting entries for the following three items have n been made. You are to provide the 20B adjusting entry for each item. A. Unpaid wages for the last two days of December, 20B amounting to $3,200 have not been recorded (disregard payroll taxes). B. On December 1, 20B rent revenue of $600 was collected for December and January. (Rent revenue was credited for a total of $600). C. A $4,000, six-month, 10% interest-bearing note payable was singed on October 1, 20B.

Liabilities represent an obligation to pay that the company must satisfy.

Cress Company is involved in a lawsuit. Note disclosure of the contingent liability which could arise does NOT have to be presented if the probability of Cress owing money as a result of the lawsuit is which of the following?