Question 1

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 $2,000 note payable for 1 year at 8% is

Accepted Answer

A)  $164.86 
B)  $240.00 
C)  $40.00 
D)  None of these choices.

Question 2

Redfearn Company has current assets of $150,000 and current liabilities of $60,000.How much inventory could it purchase on account and achieve its minimum desired current ratio of 2 to 1?

Accepted Answer

A)  $10,000 
B)  $20,000 
C)  $30,000 
D)  $40,000

Question 3

If the market value that you paid for a car is known and the annual payment and number of payments is known, the table factor to help find the interest rate can be calculated by dividing ______________________.

Accepted Answer

The answer of If the market value that you paid...

Question 4

Hanover, Inc. Use the selected data from the comparative financial statements for Hanover, Inc. to answer the questions that follo
Hanover, Inc.
Balance Sheet Accounts
(all accounts have normal balances)
(in millions)
$\begin{array}{lrr}
&\text {Dec. 30,2017 }&\text { Dec. 31,2016}\
\text { Inventories } & \$ 1,780 & \$ 1,649 \
\text { Total current assets } & \$ 9,428 & \$ 8,625\
\text { Liabilities in order of significance: } & & \
\text { Long-term debt } & \$ 14,465 & \$ 15,001 \
\text { Other noncurrent liabilities } & 4,421 & 3,148 \
\text { Deferred income taxes } & 3,504 & 3,543 \
\text { Accounts payable } & 2,556 & 2,468 \
\text { Other current liabilities } & 2,066 & 1,738 \
\text { Accrued salaries and wages } & 1,538 & 1,082 \
\text { Short-term borrowings } & 1,200 & 1,126 \
\text { Accrued advertising expense } & 793 & 928 \
\text { Income taxes payable } & 658 & 1,142
\end{array}$ ​
​
-Refer to the account information for Hanover, Inc.
​
Required:
​Compute the total current liabilities for the years 2017 and 2016.Calculate the percentage change in the total current liabilities.

Accepted Answer

The answer of Hanover, Inc. Use the selected data from...

Question 5

In 2016, Morton Co.sold 150 hot air balloons at $4,000 each.The balloons carry a 5-year warranty for defects.Morton estimates that repair costs will average 4% of the total selling price.The estimated warranty liability at the beginning of the year was $14,000.$20,000 in claims was actually incurred during the year to honor their warranty.What was the warranty expense for 2016?

Accepted Answer

A)  $10,000 
B)  $18,000 
C)  $20,000 
D)  $24,000

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 future value of $6,000 at 12% compounded quarterly for 5 years is

Accepted Answer

A)  $ 6,954 
B)  $ 9,600 
C)  $10,572 
D)  $10,836

Question 8

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. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Accepted Answer

A)  9 years 
B)  17 years 
C)  18 years 
D)  81 years

Question 9

Match each of the following terms related to interest and time value of money calculations to their appropriate definition.
-The amount that will be accumulated in the future when a series of payments is invested and accrues interest until the future time.

Accepted Answer

A) Time value of money 
B) Simple interest 
C) Compound interest 
D) Future value of a single amount 
E) Present value of a single amount
F)Annuity
G)Future value of an annuity
H)Present value of an annuity

Question 10

On November 1, 2016, Brownsville Co.borrowed $80,000 from State Bank and signed a 12%, six-month note payable, all due at maturity.The interest on this loan is stated separately.At December 31, 2016, the adjusting entry for this note includes a:

Accepted Answer

A)  Debit to Interest Expense for $3,200. 
B)  Credit to Notes Payable for $1,600. 
C)  Credit to Cash for $4,800. 
D)  Credit to Interest Payable for $1,600.

Question 11

Match each of the following terms pertaining to liabilities to their definitions.
-Amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.

Accepted Answer

A) Current liability 
B) Accounts payable 
C) Notes payable 
D) Discount on notes payable 
E) Current maturities of long-term liabilities
F)Accrued liabilities
G)Contingent liability
H)Estimated liability

Question 12

An obligation that involves an existing condition for which the outcome is not known with certainty and depends on some event that will occur in the future is call a(n) ___________________________.

Accepted Answer

The answer of An obligation that involves an existing condition...

Question 13

The difference between notes payable and accounts payable is ___________________________________.

Accepted Answer

The answer of The difference between notes payable and accounts...

Question 14

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

Accepted Answer

A) True 
 B)False

Question 15

From the following list, identify whether the change in the account balance during the year would be reported as operating (O) cash flow, investing (I) cash flow, financing (F) cash flow or not separately (N) reported on the statement of cash flows.Assume that the indirect method is used to prepare the operating activities section.Use the following response choices a-d.
-Taxes payable

Accepted Answer

A) operating (O) cash flow 
B) investing (I) cash flow 
C) financing (F) cash flow 
D) not separately (N) reported on the statement of cash flows

Question 16

Current liabilities are defined as those liabilities which will be satisfied

Accepted Answer

A)  by the end of the operating cycle. 
B)  within one year. 
C)  within one year or within the operating cycle, whichever is longer. 
D)  within one year or within the operating cycle, whichever is shorter.

Question 17

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. ​
David, a high school math teacher, wants to set up an IRA account into which he will deposit $2,000 per year.He plans to teach for 20 more years and then retire.If the interest on his account is 7% compounded annually, how much will be in his account when he retires?

Accepted Answer

A)  $4,800 
B)  $21,118 
C)  $74,458 
D)  $81,990

Question 18

When a liability is accrued, the account debited in the transaction is a stockholders' equity account.

Accepted Answer

A) True 
 B)False

Question 19

Match each of the following terms pertaining to liabilities to their definitions.
-A liability that has been incurred but has not been paid as of the balance sheet date.

Accepted Answer

A) Current liability 
B) Accounts payable 
C) Notes payable 
D) Discount on notes payable 
E) Current maturities of long-term liabilities
F)Accrued liabilities
G)Contingent liability
H)Estimated liability

Question 20

If a company purchases $3,000 worth of inventory with terms of 1/15, n30 and pays within 15 days, then the amount paid to the seller would be

Accepted Answer

A)  $2,550 
B)  $2,970 
C)  $3,000 
D)  $3,030

Exam 9: Current Liabilities, Contingencies, and the True 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 $2,000 note payable for 1 year at 8% is

Redfearn Company has current assets of $150,000 and current liabilities of $60,000.How much inventory could it purchase on account and achieve its minimum desired current ratio of 2 to 1?

If the market value that you paid for a car is known and the annual payment and number of payments is known, the table factor to help find the interest rate can be calculated by dividing ______________________.

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

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 future value of $6,000 at 12% compounded quarterly for 5 years 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. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -The amount that will be accumulated in the future when a series of payments is invested and accrues interest until the future time.

On November 1, 2016, Brownsville Co.borrowed $80,000 from State Bank and signed a 12%, six-month note payable, all due at maturity.The interest on this loan is stated separately.At December 31, 2016, the adjusting entry for this note includes a:

Match each of the following terms pertaining to liabilities to their definitions. -Amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.

An obligation that involves an existing condition for which the outcome is not known with certainty and depends on some event that will occur in the future is call a(n) ___________________________.

The difference between notes payable and accounts payable is ___________________________________.

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

Current liabilities are defined as those liabilities which will be satisfied

When a liability is accrued, the account debited in the transaction is a stockholders' equity account.

Match each of the following terms pertaining to liabilities to their definitions. -A liability that has been incurred but has not been paid as of the balance sheet date.

If a company purchases $3,000 worth of inventory with terms of 1/15, n30 and pays within 15 days, then the amount paid to the seller would be

Exam 9: Current Liabilities, Contingencies, and the True 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 $2,000 note payable for 1 year at 8% is

Redfearn Company has current assets of $150,000 and current liabilities of $60,000.How much inventory could it purchase on account and achieve its minimum desired current ratio of 2 to 1?

If the market value that you paid for a car is known and the annual payment and number of payments is known, the table factor to help find the interest rate can be calculated by dividing ______________________.

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

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 future value of $6,000 at 12% compounded quarterly for 5 years 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. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -The amount that will be accumulated in the future when a series of payments is invested and accrues interest until the future time.

On November 1, 2016, Brownsville Co.borrowed $80,000 from State Bank and signed a 12%, six-month note payable, all due at maturity.The interest on this loan is stated separately.At December 31, 2016, the adjusting entry for this note includes a:

Match each of the following terms pertaining to liabilities to their definitions. -Amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.

An obligation that involves an existing condition for which the outcome is not known with certainty and depends on some event that will occur in the future is call a(n) ___________________________.

The difference between notes payable and accounts payable is ___________________________________.

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

Current liabilities are defined as those liabilities which will be satisfied

When a liability is accrued, the account debited in the transaction is a stockholders' equity account.

Match each of the following terms pertaining to liabilities to their definitions. -A liability that has been incurred but has not been paid as of the balance sheet date.

If a company purchases $3,000 worth of inventory with terms of 1/15, n30 and pays within 15 days, then the amount paid to the seller would be

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 $2,000 note payable for 1 year at 8% is