1.All of the following are generally considered current liabilities on a company balance sheet except
Wages Payable
Interest Payable
Bonds Payable
Taxes Payable
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2.If a one-year company loan spans equally over 2 fiscal periods, but interest is set to be paid when the loan amount itself is due, the company would
Still pay cash out for half the interest at the end of the first fiscal year to keep its records correct
Accrue the appropriate amount of interest payable at the end of the first fiscal period
Increase the Loan Payable amount by the interest amount accrued at the end of the first fiscal period
Do nothing until the interest payment itself is actually due
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3.If a firm has a warranty obligation on its product that is redeemed by the customer for cash, the firm would
Record a warranty payable at the time of the redemption
Reduce the already recorded warranty payable and cash for the amount of the claim
Do nothing and just fix the product
Reduce revenues and retained earnings at the time of the warranty redemption
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4.If a company collects sales tax on its products for the state in which it operates its business, it would
Include the amount in Revenue
Include the amount as an expense
Record a Sales Tax Payable until it is due to the state
Put the cash in a box under the counter
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5.An installment loan generally has all of the following features except
The cash payment per period by the borrower is the same amount each time
The amount of the payment applied to interest decreases over time
The amount of the payment applied to interest increases over time
The amount of the payment applied to the principal increases over time
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6.A pre-approved financing plan that allows companies to borrow and repay funds as needed up to the maximum amount set by the creditor and that is often used for relatively short-term borrowing to finance varying business needs is
Trade credit
A Line of Credit
An account payable
A debit card
1.All of the following are generally considered current liabilities on a company balance sheet except
| Wages Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bonds Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Taxes Payable ------------------------------------ 2.If a one-year company loan spans equally over 2 fiscal periods, but interest is set to be paid when the loan amount itself is due, the company would
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Related questions
A lease agreement that qualifies as a capital lease calls for annual lease payments of $30,000 over a five-year lease term, with the first payment at January 1, the leaseâs inception. The interest rate is 4%
Prepare an amortization table:
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| If lesseeâs fiscal year is the calendar year, what would be the amount of the lease liability that the lessee would report in its balance sheet at the end of the first year? |
| What would be the interest payable? |
The following unadjusted trial balance is for ACE CONSTRUCTIONCO. as of the end of its 2015 fiscal year. The June 30, 2014,credit balance of the ownerâs capital account was $51,200, and theowner invested $29,000 cash in the company during the 2015 fiscalyear.
ACE CONSTRUCTION CO. | |||||
No. | Account Title | Debit | Credit | ||
101 | Cash | $ | 19,000 | ||
126 | Supplies | 8,000 | |||
128 | Prepaid insurance | 5,500 | |||
167 | Equipment | 145,570 | |||
168 | Accumulated depreciationâEquipment | $ 23,000 | |||
201 | Accounts payable | 5,000 | |||
203 | Interest payable | 0 | |||
208 | Rent payable | 0 | |||
210 | Wages payable | 0 | |||
213 | Property taxes payable | 0 | |||
251 | Long-term notes payable | 23,000 | |||
301 | V. Ace, Capital | 80,200 | |||
302 | V. Ace, Withdrawals | 31,000 | |||
401 | Construction fees earned | 150,000 | |||
612 | Depreciation expenseâEquipment | 0 | |||
623 | Wages expense | 43,000 | |||
633 | Interest expense | 2,530 | |||
637 | Insurance expense | 0 | |||
640 | Rent expense | 15,000 | |||
652 | Supplies expense | 0 | |||
683 | Property taxes expense | 5,000 | |||
684 | Repairs expense | 2,700 | |||
690 | Utilities expense | 3,900 | |||
Totals | $ | 281,200 | $ | 281,200 | |
Adjustments:
a. | The supplies available at the end of fiscal year 2015 had a costof $2,880. |
b. | The cost of expired insurance for the fiscal year is $3,465. |
c. | Annual depreciation on equipment is $8,900. |
d. | The June utilities expense of $520 is not included in theunadjusted trial balance because the bill arrived after the trialbalance was prepared. The $520 amount owed needs to berecorded. |
e. | The companyâs employees have earned $1,500 of accrued wages atfiscal year-end. |
f. | The rent expense incurred and not yet paid or recorded at fiscalyear-end is $200. |
g. | Additional property taxes of $1,000 have been assessed for thisfiscal year but have not been paid or recorded in the accounts. |
h. | The long-term note payable bears interest at 12% per year. Theunadjusted Interest Expense account equals the amount paid for thefirst 11 months of the 2015 fiscal year. The $230 accrued interestfor June has not yet been paid or recorded. (The company isrequired to make a $4,000 payment toward the note payable duringthe 2016 fiscal year.) |
1.Prepare a 10-column work sheet for fiscalyear 2015, starting with the unadjusted trial balance and includingadjustments based on the additional facts.
2. Prepare the statement of owner's equity for the year endedJune 30
3.Prepare the classified balance sheet at June 30, 2015.
Kerala Company borrowed $10,000 on a two-year, zero coupon note. The note was issued on December 31, 2018. The face amount of the note, $12,544, is to be paid at maturity on December 31, 2020. This company uses the straight line method of amortization.
Required:
1. Allocate the interest of $2,544 to the two one-year interest periods, using straight-line interest amortization.
$
2. Prepare the entries to recognize the borrowing, the first year's interest expense, and the second year's interest expense plus redemption of the note at maturity. For compound entries, for those boxes in which no entry is required, leave the box blank.
| 2018, Dec. 31 | Cash | ||
| Discount on Notes Payable | |||
| Notes Payable | |||
| (Record issuance of note at discount) | |||
| 2019, Dec. 31 | Interest Expense | ||
| Discount on Notes Payable | |||
| (Record interest expense) | |||
| 2020, Dec. 31 | Interest Expense | ||
| Notes Payable | |||
| Discount on Notes Payable | |||
| Cash | |||
| (Record interest expense and repayment of note principal) |
