Exam 9: Current Liabilities, Contingencies, and the Time Value of Money

Below are three notes payable: REQUIRED: Part 1. For each of the notes, calculate the simple interest due at the end of the term. Part 2. Now assume that the interest on the notes is compounded annually. Calculate the amount of interest due at the end of the term for each note. Part 3. Finally, assume that the interest on the notes is compounded semiannually. Calculate the amount of interest due at the end of the term for each note. Part 4. What conclusion can you draw from a comparison of your results of each of the three scenarios?

The solution to this problem requires time value of money calculations. Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Clarion Inc. issues numerous discount coupons throughout the year. A balance in the Estimated Liability for Coupon Redemption

A company gives a two-year warranty for its product. The estimated liability for product warranties is a current liability.

Review the Note Disclosure of Legal Matters. REQUIRED: 1 What type of liability does this lawsuit typify? 2 In your opinion, should the Company prepare a journal entry in 2015 to record a liability for this lawsuit? Why or why not?

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -A series of payments of equal amount.