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

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. ​ The total amount of interest compounded quarterly on a $2,000 note payable for 1 year at 8% is

Redfearn Company has current assets of $150,000 and current liabilities of $60,000.How much inventory could it purchase on account and achieve its minimum desired current ratio of 2 to 1?

If the market value that you paid for a car is known and the annual payment and number of payments is known, the table factor to help find the interest rate can be calculated by dividing ______________________.

Hanover, Inc. Use the selected data from the comparative financial statements for Hanover, Inc. to answer the questions that follo Hanover, Inc. Balance Sheet Accounts (all accounts have normal balances) (in millions) Dec. 30,2017 Dec. 31,2016 Inventories \ 1,780 \ 1,649 Total current assets \ 9,428 \ 8,625 Liabilities in order of significance: Long-term debt \ 14,465 \ 15,001 Other noncurrent liabilities 4,421 3,148 Deferred income taxes 3,504 3,543 Accounts payable 2,556 2,468 Other current liabilities 2,066 1,738 Accrued salaries and wages 1,538 1,082 Short-term borrowings 1,200 1,126 Accrued advertising expense 793 928 Income taxes payable 658 1,142 ​ ​ -Refer to the account information for Hanover, Inc. ​ Required: ​Compute the total current liabilities for the years 2017 and 2016.Calculate the percentage change in the total current liabilities.

In 2016, Morton Co.sold 150 hot air balloons at $4,000 each.The balloons carry a 5-year warranty for defects.Morton estimates that repair costs will average 4% of the total selling price.The estimated warranty liability at the beginning of the year was $14,000.$20,000 in claims was actually incurred during the year to honor their warranty.What was the warranty expense for 2016?

A note payable that is due in six months is a current liability.

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. The future value of $6,000 at 12% compounded quarterly for 5 years is

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?

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -The amount that will be accumulated in the future when a series of payments is invested and accrues interest until the future time.

On November 1, 2016, Brownsville Co.borrowed $80,000 from State Bank and signed a 12%, six-month note payable, all due at maturity.The interest on this loan is stated separately.At December 31, 2016, the adjusting entry for this note includes a:

Match each of the following terms pertaining to liabilities to their definitions. -Amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.

An obligation that involves an existing condition for which the outcome is not known with certainty and depends on some event that will occur in the future is call a(n) ___________________________.

The difference between notes payable and accounts payable is ___________________________________.

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

From the following list, identify whether the change in the account balance during the year would be reported as operating (O) cash flow, investing (I) cash flow, financing (F) cash flow or not separately (N) reported on the statement of cash flows.Assume that the indirect method is used to prepare the operating activities section.Use the following response choices a-d. -Taxes payable

Current liabilities are defined as those liabilities which will be satisfied

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. ​ David, a high school math teacher, wants to set up an IRA account into which he will deposit $2,000 per year.He plans to teach for 20 more years and then retire.If the interest on his account is 7% compounded annually, how much will be in his account when he retires?

When a liability is accrued, the account debited in the transaction is a stockholders' equity account.

Match each of the following terms pertaining to liabilities to their definitions. -A liability that has been incurred but has not been paid as of the balance sheet date.

If a company purchases $3,000 worth of inventory with terms of 1/15, n30 and pays within 15 days, then the amount paid to the seller would be