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

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays April 2,then the amount paid to the seller would be

A company has $200 in cash,$500 in accounts receivable,and $700 in inventory.If current liabilities are $400,then the quick ratio would be

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. - If interest is compounded annually,the total amount of interest on an $18,000 note payable for four years at 10% is

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

Which of the following is not classified as a noncurrent liability?

If you must calculate the present value of an amount at 12% compounded quarterly for two years,then the interest factor used in the calculation is

If current assets amount to $62,000,total assets $350,000,current liabilities $31,000,and total liabilities $125,000,then the current ratio is

Terms of 2/10,n/30 mean that if the discount is not taken,full payment is due within __________ days.

For a given contingent liability,a company has the choice of either recording it on the balance sheet or disclosing it in the notes.

Assume that you want to accumulate $20,000 as a down payment on a home.You believe that you can save $2,000 per semiannual period,and your bank will pay interest of 6% per year,or 3% per semiannual period.How long will it take you to accumulate the desired amount?

Tyson Trucking won a settlement in a lawsuit and was offered four different payment alternatives by the defendant's insurance company.The interest rate is 6%.Ignoring tax considerations,which of the following four alternatives has the highest present value? Support your answer with the appropriate calculations. I) $\quad \$ 150,000$ now II) $\quad \$ 45,000$ per year for the next four years (payment made at the end of the year) III) $\quad \$ 5,000$ now and then $\$ 20,000$ per year for the next ten years (payment made at the end of the year) IV) $\quad \$ 5,000$ now and then $\$ 5,000$ per year for the next ten years (payment made at the end of the year) plus a lump-sum payment of $\$ 200,000$ at the end of the eleventh year

Which of the following statements regarding contingencies is true?

If the present and future values are known along with the number of periods,then the __________ can be determined.

A company's weekly payroll amounts to $50,000 and payday for the week is every Friday.Employees work five days per week,Monday through Friday.The appropriate journal entry was recorded at the end of the accounting period,Monday,March 31,2017.What amount is wages expense for April for the payday,Friday,April,4,2017?

You are interested in accumulating $10,000 so that you can take a cruise in three years.If you try to solve for the amount that you need to invest each year,earning 6% interest compounded annually,the $10,000 represents

A company has $8,000 in cash,$9,250 in accounts receivable,and $19,500 in inventory.If current liabilities are $14,350,then the quick ratio would be

What is the purpose of the current ratio? How does the quick ratio differ from the current ratio?

To calculate the future value of an amount that is invested at 12%,compounded quarterly,at the end of three years,the interest factor used would be

If a company purchases $3,200 worth of inventory with terms of 3/10,n/30 on March 3 and pays March 12,then the amount paid to the seller would be

Hanover,Inc. Use the selected data from the comparative financial statements for Hanover,Inc.to answer the questions that follow. Hanover, Inc. Balance Sheet Accounts (all accounts have normal balances) (in millions) Dec. 30,2018 Dec. 31,2017 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 sal aries 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 2018 and 2017.Calculate the percentage change in the total current liabilities.