Exam 9: Long-Lived Tangible and Intangible Assets

The journal entry required on the company's books to record the note payable on July 1, 20X0 would include which of the following?

In 20X3, 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?

Income tax expense reported on the income statement is $45,000 for 20X0, and the tax return for 20X0 (the first year) shows an income tax liability of $42,000 because of a deduction that cannot be taken until 20X1. The future income tax amount on the statement of financial position at the end of 20X0 will be which of the following?

The following information is available for Lowell Company: Current Assets Cash \ 4,000 Marketable securities 75,000 Accounts receivable 61,000 Inventories 110,000 Prepaid expenses Total current assets \ 280,000 Total current liabilities are $80,000. The quick ratio for Lowell is

Purchase of inventory for cash will:

There is a reciprocal relationship between which of the following?

1. What is a contingent liability? 2. When must a contingent liability be recorded through a journal entry ? 3. When should a contingent liability be disclosed in the footnotes to the financial statements ? 4. When is disclosure of a contingent liability not required?

A company's quick ratio:

Kristen's grandmother promises to give her $1,000 at the end of five years. How much is the money worth today, assuming Kristen could invest the money and earn a 6% annual rate of return? (Round to the nearest dollar).

Agracon Foods distributes coupons to consumers which may be presented, on or before a stated expiry date, to grocery stores for discounts on certain Agracon products. The stores are reimbursed when they send the coupons to Agracon. In Agracon's experience, only about 50% of these coupons are redeemed. During 2011, Argracon issued two separate series of coupons as follows: Amounts Reimbursed as of Issued On Total Value Coupon Expiry Date Dec 3120X1 \ Jan 120X1 \ 250,000 Jun 30 20X1 \ 118,000 Oct 120X1 \ 360,000 Mar 3120X2 \1 50,000 Agracon's only journal entries for 20X1 recorded debits to coupon expense, and credits to cash of $268,000. Their December 31, 20X1 balance sheet should include a provision for unredeemed coupons of:

Which of the following most likely would be classified as a current liability?

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

On the company's 20X0 year-end statement of financial position, the liability related to this note should be reported as which of the following?

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.

An annuity is a series of consecutive payments, each one increasing by a fixed dollar amount over the payment amount of the prior year.

The trade payables turnover ratio tests how quickly our credit customers pay their bills.

Contingencies are disclosed in a note if it is probable that cash of other assets will be required to settle the obligation, or if the amount of the obligation cannot be measured with sufficient reliability.

All contingent liabilities should be classified as either current or long-term liabilities on the statement of financial position for the current period.

The balance in the Future Income Tax Asset account always will reverse or "turn around" over a period of one or more future periods if no new differences originate.

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?