Exam 9: Long-Lived Tangible and Intangible Assets

Emerald Jewelers is a retail store operating in Ontario, where the GST is 5% and the PST is 8%. For the month of June, Emerald sold $45,000 worth of jewelry to customers, 60% of which were cash sales and the balance paid by credit cards. Credit card fees are 2.5%. Based on this information, what is the total debit to Accounts Receivable for the month of June?

The following data is available for Toys 4 U for the years 2004 through 20X7: Toys 4 U Financial Data 20X7 20X6 20X5 20X4 Cost of sales \ 8,191 \ 7,710 \ 6,892 \ 6,592 Accounts payable 1,415 1,280 1,346 1,182 1. Calculate the trade payables turnover ratio for the following years: a. 20X7 b. 20X6 c. 20X5 2. Calculate the number of days it is taking Toys 4 U to pay their vendors: a. 20X7 b. 20X6 c. 20X5 3. Explain whether Toys 4 U is doing a better job at paying their vendors in a timely manner.

With an interest-bearing note, the amount of cash received upon issue of the note generally exceeds the note's face value.

Property tax payable is classified as a long-term liability because it is related to property, a noncurrent asset.

Cathy Company reported the following summary amounts for its second year ended December 31, 20X1: Revenues \ 100,000 Expenses (excluding income tax) 80,000 Income taxes paid for 20X1 10,000 Income tax rate, 40% Give the entry to record income tax for 20X1.

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

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

A low trade payables turnover ratio caused by an aggressive cash management strategy, while the quick ratio is adequate, would be perceived by analysts as a weakness.

Accounts payable are recorded on the books at their:

Company P had pretax profit of $30,000 in 20X0 and $34,000 in 20X1. A revenue of $2,000 was included correctly on the 20X0 income statement and was properly reported on the 20X1 income tax return. The corporate income tax rate was 25%. Give the entries relating to the incurrence of the tax liability for 20X0 and 20X1: 20X0: 20X1:

The future value of an annuity is always more than the sum of its payments whereas the present value of an annuity is always less than the sum of its payments.

Current liabilities are expected to be paid within one year.

Under IFRS, a distinction is made between provisions and contingencies. Provisions are estimated liabilities that are reported on the statement of financial position whereas contingencies are not recognized as liabilities because of the uncertainty of the amount and timing of future payments.

GST (goods and services tax) collected by a retailer is recorded by

Failure to record a liability will probably

Freeman Inc. reported a profit of $40,000 for 20X0. The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 20X1. Assuming a 30% income tax rate, this situation would cause a 20X0 future tax amount of which of the following?

At the end of the annual accounting period, the adjusting entries for the following three items have not been made. You are to provide the 20X1 adjusting entry for each item. A. Unpaid wages for the last two days of December, 20X1 amounting to $3,200 have not been recorded (disregard payroll taxes). B. On December 1, 20X1 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, 20X1.

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

How much would Kristen have to deposit in the bank at the end of each of the next five years if she wishes to have $5,000 in the bank at the end of that time, assuming she will be earning 6% annual rate of return? (Round to the nearest dollar.)

A Co, a biotechnology company, reported cost of sales of $345.2 million and trade payables of $121.6 million for 20X3. In 20X2, cost of sales was $300.8 million and trade payable was $103.9 million. What was A Co's trade payables turnover ratio in 20X3?