Cole Company had the following accounts and balances on December 31,2017:\[\begin{array} { l r } \text { Income Taxes Payable } & \$ 51,250 \\ \text { Cash } & 20,000 \\ \text { Notes Payable, 10\%, due June 2, } 2018 & 1,000 \\ \text { Accounts Receivable } & 267,500 \\ \text { Equipment } & 950,000 \\ \text { Accounts Payable } & 104,400 \\ \text { Inventory } & 85,000 \\ \text { Land } & 600,000 \\ \text { Allowance for Doubtful Accounts } & 12,000 \\ \text { Discount on Notes Payable } & 150 \\ \text { Notes Receivable, maturity 2/1/2024 } & 5,000 \\ \text { Current Maturities of Long-Term Debt } & 6,900 \\ \text { Unearned Revenue } & 4,320 \\ \text { Interest Payable } & 1,010 \\ \text { Wages Payable } & 6,000 \\ \text { Marketable Securities } & 40,000 \\ \text { Capital Stock } & 900,000 \end{array}\] Required 1.Compute Cole's working capital. 2.Compute Cole's current ratio.What does this ratio indicate about Cole's condition?

1. ? \[\begin{aligned} \text { Working

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

Executive,Inc.has a weekly payroll of $10,000 for a five-day workweek,Monday through Friday.If December 31,the last day of the accounting year,falls on Thursday,Executive would make an adjusting entry that would

(Multiple Choice)

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Question 81

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

(True/False)

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Question 82

Which of the following statements about current liabilities is true?

(Multiple Choice)

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Question 83

On July 1, 2017, Morningside Co. borrowed $33,000 from the bank. Morningside signed a ten-month, 6% promissory note for the entire amount. Morningside uses a calendar year-end. Required 1. Analyze the impact on the accounting equation of the journal entry on July 1, 2017, to record the issuance of the promissory note. 2. Analyze the impact of adjusting entries needed at year-end. 3. Analyze the impact of the journal entry on May 1, 2018, to record the payment of principal and interest.

(Essay)

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Question 84

On September 1, 2017, Ensign Inc. borrowed $21,000 from Emerald City National Bank by issuing a 12-month note. The bank discounted the note at 7.5%. Required 1. Analyze the impact of the journal entry needed to record the issuance of the note. 2. Analyze the impact of the journal entry needed at December 31, 2017, to accrue interest. 3. Analyze the impact of the journal entry to record the payment of the note on September 1, 2018. 4. What effective rate of interest did Ensign pay?

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Question 85

Accrued wages is a current liability.

(True/False)

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Question 86

Assume the current ratio is 3 to 4.Purchases of inventory on account would cause the current ratio to

(Multiple Choice)

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Question 87

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. - Mackie's individual retirement account (IRA)currently has a balance of $100,000 and is earning 6%.Beginning one year from today,what equal annual amounts can be withdrawn from the IRA for ten years so that the balance after the tenth withdrawal is zero?

(Multiple Choice)

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Question 88

If your bank gives you a $2,000 loan at 8% per year,but deducts the interest in advance,is 8% the "real" rate of interest that you will pay?

(Multiple Choice)

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Question 89

Cole Company had the following accounts and balances on December 31,2017: Income Taxes Payable \ 51,250 Cash 20,000 Notes Payable, 10\%, due June 2, 2018 1,000 Accounts Receivable 267,500 Equipment 950,000 Accounts Payable 104,400 Inventory 85,000 Land 600,000 Allowance for Doubtful Accounts 12,000 Discount on Notes Payable 150 Notes Receivable, maturity 2/1/2024 5,000 Current Maturities of Long-Term Debt 6,900 Unearned Revenue 4,320 Interest Payable 1,010 Wages Payable 6,000 Marketable Securities 40,000 Capital Stock 900,000 Required 1.Compute Cole's working capital. 2.Compute Cole's current ratio.What does this ratio indicate about Cole's condition?

(Essay)

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Question 90

On November 1,Greenfield Corporation borrowed $55,000 from a bank and signed a 12%,90-day note payable in the amount of $55,000.If you assume 360 days in year,the November 30 adjustment will

(Multiple Choice)

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Question 91

If a company borrows money from its bank and the bank deducts the interest in advance,the company would record the amount of the interest deduction as

(Multiple Choice)

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Question 92

A current ratio of __________ or better is usually considered a comfortable margin.

(Short Answer)

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Question 93

If a company purchases $3,000 worth of inventory with terms of 1/15,n/30 and pays within 15 days,then the amount paid to the seller would be

(Multiple Choice)

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Question 94

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. - A company will have to pay a $50,000 liability in four years.How much must be deposited now into a bank account earning 8% compounded semiannually to fully fund the future payment?

(Multiple Choice)

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Question 95

Long-term assets are $800,current liabilities are $500,and long-term liabilities are $600.If the current ratio is 2.5 to 1,then current assets are

(Multiple Choice)

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Question 96

Marsh Corporation borrowed $90,000 by issuing a 12%,six-month note payable,all due at the maturity date.After one month,the company's total liability for this loan amounts to

(Multiple Choice)

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Question 97

Boston Trombley Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is anticipated to continue for several years,but no reasonable estimate can be made at this time regarding ultimate financial responsibility.This situation is an example of a(n)

(Multiple Choice)

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Question 98

A cereal company includes one premium coupon in every cereal box.Upon returning ten such coupons to the company,a customer will be sent a free cereal bowl.In a recent year,the company sold 200,000 boxes of cereal for $1 a box.It is estimated that 20% of the coupons will be returned.If the cereal bowls cost the company $3 each,what amount of liability for premium redemptions must be recorded by the company?

(Multiple Choice)

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Question 99

Using the future value table,a student found that the future value amount of $1 for five years at an annual interest rate of 10% is 1.611.The student also observed that the future value of $1 for five years at 10% compounded semiannually is 1.629.This means that

(Multiple Choice)

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Question 100

Showing 81 - 100 of 176

Executive,Inc.has a weekly payroll of $10,000 for a five-day workweek,Monday through Friday.If December 31,the last day of the accounting year,falls on Thursday,Executive would make an adjusting entry that would

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

Which of the following statements about current liabilities is true?

Accrued wages is a current liability.

Assume the current ratio is 3 to 4.Purchases of inventory on account would cause the current ratio to

If your bank gives you a $2,000 loan at 8% per year,but deducts the interest in advance,is 8% the "real" rate of interest that you will pay?

On November 1,Greenfield Corporation borrowed $55,000 from a bank and signed a 12%,90-day note payable in the amount of $55,000.If you assume 360 days in year,the November 30 adjustment will

If a company borrows money from its bank and the bank deducts the interest in advance,the company would record the amount of the interest deduction as

A current ratio of __________ or better is usually considered a comfortable margin.

If a company purchases $3,000 worth of inventory with terms of 1/15,n/30 and pays within 15 days,then the amount paid to the seller would be

Long-term assets are $800,current liabilities are $500,and long-term liabilities are $600.If the current ratio is 2.5 to 1,then current assets are

Marsh Corporation borrowed $90,000 by issuing a 12%,six-month note payable,all due at the maturity date.After one month,the company's total liability for this loan amounts to

Boston Trombley Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is anticipated to continue for several years,but no reasonable estimate can be made at this time regarding ultimate financial responsibility.This situation is an example of a(n)

Using the future value table,a student found that the future value amount of $1 for five years at an annual interest rate of 10% is 1.611.The student also observed that the future value of $1 for five years at 10% compounded semiannually is 1.629.This means that

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

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