Exam 8: Current Liabilities and Fair Value Accounting

Use this information to answer the following question. Periods Present Value af 1 at 7 Percent Present Value af Ordinary Annuity af \1 at 7 Percent 1 0.935 0.935 2 0.873 1.808 3 0.816 2.624 What is the present value of receiving $400 at the end of each year for three years?

Calculate answers to the following questions using future value and/or present value tables. a. If $100 is deposited in an account paying 8 percent simple interest, what will be the value of the account in five years? b. If an accumulation of $4,000 is desired at the end of four years, what amount must be deposited now to accomplish that goal, assuming 12 percent interest compounded annually? c. A deposit of $1,000 made at the end of every six months for five years will grow to what amount, assuming 10 percent interest compounded semiannually? d. What is the present value of $150 received at the end of each year for 4 years, assuming 9 percent interest compounded annually? e. What amount must be deposited at the bank today to grow to $10,000 in five years, assuming 14 percent interest compounded semiannually?

Unearned revenue arises from the acceptance of payment in advance for a service to be performed.

Purchase agreements are

Product warranties are an expense of the period in which the product must be repaired or replaced.

Commercial paper consists of secured loans that are sold to the public.

The product warranty liability is an example of an estimated liability.

A business accepts a 12 percent,$19,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?

Use this information to answer the following question. The following totals for the month of November were taken from the payroll register of Levine Company: Salaries expense \1 2,000 Social security and Medicare taxes withheld 550 Income taxes withheld 2,500 Medical insurance deductions 250 Life insurance deductions 200 Salaries subiect to federal and state unemployment taxes of 6.2 percent 4,000 The amount of liabilities relating to payroll,other than Salaries Payable,is

Usually,failure to record a liability means failure to record a(n)

A liability for dividends exists only when the board of directors declares them.

The amount recorded for Payroll Taxes and Benefits Expense is borne entirely by the employee.

Hi-Tech Company produces widgets that cost $60 each and have a 5 percent failure rate.If 500 widgets are sold,the entry to record the estimated product warranty expense would be

Only the unused portion of a line of credit is recognized as a liability.

Of a company's employees,50 percent typically qualify to receive two weeks' paid vacation a year in 50 working weeks.The entry to record the amount of estimated liability for vacation pay for a week in which the total payroll is $2,900

There is no limit to the amount of income subject to the FUTA tax.

Which of the following most likely is a definitely determinable liability during interim periods?

Days' payable is the shortest in which of the following industries?

In a deferred payment arrangement,interest is charged only if it is stated.

Use this information to answer the following question. Baker Company has the following information for the pay period of January 1-15,2010.Payment occurs on January 20. Gross payroll \ 16,000 Federal income taxes withheld \ 1,800 Social security and Medicare rate 7.65\% Federal unemployment tax rate .8\% State unemployment tax rate 5.4\% The entry to record the payroll would include a