Exam 11: Current Liabilities and Fair Value Accounting

Use this information to answer the following question. -What amount must be deposited today so that $1,200 may be withdrawn at the end of each year for three years,assuming an APR of 7 percent?

The entry that includes a debit to Payroll Taxes and Benefits Expense also includes credits to Federal Unemployment Tax Payable and State Unemployment Tax Payable.

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

Both the employee and the employer must bear the tax burden for unemployment benefits.

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?

Vacation pay is charged properly as an expense in the month in which the employee takes a vacation.

Which of the following is a tax borne by the employer but not the employee?

Working capital equals current assets divided by current liabilities.

Because failure to record a liability generally leads to failure to record an expense,it usually results in an overstatement of income.

Product warranties are an expense of the period in which the related product is sold.

A liability for dividends exists only when the board of stockholders requests them.

The future value of an ordinary annuity table would not include the factor

The lower the interest rate,the lower the future value factor.

Use this information to answer the following question. -If an accumulation of $16,000 is desired at the end of three years,what amount must be deposited at the end of each of the three years,assuming an APR of 12 percent?

An employee has gross earnings of $1,200 and withholdings of $91.80 for Social Security and Medicare taxes and $120 for income taxes.The employer pays $91.80 for Social Security and Medicare taxes,$9.60 for FUTA,and $64.80 for SUTA.The total cost of this employee to the employer is

Use this information to answer the following question. -What is the present value of receiving $800 at the end of each year for three years,assuming an APR of 7 percent?

Saybrook Company purchased a machine on January 2,2014.Under the terms of the purchase agreement,the company is required to make 14 quarterly installment payments of $23,000 each,beginning April 1,2014.Assuming 16 percent interest compounded quarterly,determine the purchase price of the machine.Use future value and/or present value tables in calculating your answer.

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

When a business sells an item and collects a state sales tax on it,a current liability to the state arises.

Which of the following phrases is not descriptive of an ordinary annuity?