Exam 10: Current Liabilities and Fair Value Accounting

Company A's current assets = $10,000,total assets = $26,000,current liabilities = $7,000 and total liabilities = $47,000.What is Company A's current ratio?

All of the following are estimated liabilities except

If an accrued liability for salaries is not recorded,income for the following period will be overstated.

Payroll Taxes and Benefits Expense includes all of the following except

Meggie's Fitness Center received $800 from a customer in advance for a one-year membership in the fitness center.The entry that would be made to record the fee receipt is

Use this information to answer the following question. -A single deposit of $7,000 made at the beginning of period 1 and earning 12 percent interest compounded annually would grow to how much at the end of three years?

A commitment is a legal obligation that meets the technical requirements for recognition as a liability.

An asset purchased according to a deferred payment plan should be recorded based on the total cash paid over the life of the plan.

A liability must never be classified as current if it is due in more than one year.

Which of the following is not a commitment?

Gross earnings minus deductions equal take-home pay.

Use this information to answer the following question. -What amount must be deposited today to grow to $900 in three years,assuming an APR of 7 percent?

Second National Bank computes interest semiannually.If the annualized interest rate (APR)is currently 6 percent,the amount deposited today should be multiplied by which future value factor to calculate the amount that will accumulate by the end of 10 years?

At the time a company signs a contract to pay an employee a certain salary in the future,it records a liability.

The FUTA tax rate most often actually paid by employers is 0.8 percent.

The payables turnover is the number of times,on average,that a company pays its accounts payable in an accounting period.

Hilda wishes to deposit an amount into her savings account that will enable her to withdraw $1,600 per year for the next four years.She should deposit an amount equal to $1,600 multiplied by the

You win the grand prize and can choose between receiving $100,000 today or $20,000 per year for seven years.Ignoring income taxes,how would you go about making your decision?

Calculate answers to the following scenarios. a.Jackson Company purchased machinery by executing a $50,000 non-interest-bearing note due in four years.Assuming the going rate for similar notes is 6 percent and using the appropriate present value table,for how much should the machinery be recorded? b.Wendy Kwon is making bank deposits of $3,000 at the beginning of each year for three years for purposes of buying a car.Assuming an interest rate of 7 percent compounded annually,how much will she have saved for the purchase at the end of year 3? (Calculate manually and round to the nearest dollar. ) c.Ashton Jones would like to make a lump-sum deposit today so that he can withdraw $15,000 at the end of each year for the next three years.Assuming a 9 percent interest rate and using the appropriate present value table,what should she invest today?

Use this information to answer the following question. The following totals for the month of September were taken from the payroll register of Meadors Company: -The amount of liabilities relating to payroll,other than Salaries Payable,is