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

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. The total amount of interest compounded quarterly on a $1,500 note payable for 1 year at 12% is

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. The present value of $7,000 to be received in 7 years at 7% compounded annually is

When a bank deducts the interest on a note in advance,the note has been ____________________.

According to the text,almost all current liabilities appear in the Operating Activities category of the statement of cash flows,but there are exceptions.Explain the exceptions and give an example.

Dallas Company uses the indirect method of preparing the statement of cash flows and has the following current liabilities at the beginning of the period: Accounts Payable,$35,000;Taxes Payable,$15,000.At the end of the period,the balances of the account are as follows: Accounts Payable,$25,000;Taxes Payable,$20,000.What amounts will appear in the cash flow statement? In what category of the statement will they appear?

The landlord records the security deposit she collects from the tenant as a(n)

If current assets amount to $150,total assets $350,current liabilities $65,and total liabilities $100,then the current ratio is

Mobile Designs,Inc. Use the selected data from the comparative financial statements for Mobile Designs,Inc.to answer the questions that follow. Mobile Designs,Inc. Balance Sheet Accounts (all accounts have normal balances) (in millions) Refer to the account information for Mobile Designs,Inc. REQUIRED: Calculate the current and quick ratios for 2013 and 2012.Comment on the direction and significance of the change in the ratios.

Accrued wages is not a current liability.

Which of the following statements regarding contingencies is true?

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

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

There are very important differences between U.S.and international standards regarding contingencies.Even the terms used to refer to situations with unknown outcomes differ.Explain these differences.

Almost all current liabilities appear within the ___________________ Activities category of the Statement of Cash Flows.

You just purchased an automobile for $19,450 and must decide how to pay for it.Your local bank has granted you a five-year loan.Annual payments on the loan will be made at the end of each year and the amount of the loan payments,which include principal and interest,is $5,000 per year.What is the interest rate that is being charged on the loan?

You have received an email from a new accounting client,Jamal Parker,who has just started a new business.Jamal would like you to explain whether it is really that beneficial for him to take advantage of a 2/10,net 30 discount offered by one of his suppliers,given his limited cash flow.In a memo,explain to him why this is or is not a sound financial move for his new company.Most firms attempt to pay their accounts payable within the discount period to take advantage of the discount.Why is that normally a sound financial move?

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?

Employees earn $5,000 per day,work five days per week,Monday through Friday,and get paid every Friday.If the previous payday was January 26 and the accounting period ends on January 31,what amount is the ending balance in the wages payable account?

Advance ticket sales for a concert next month are a current liability.

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 adjusting entry will be: