FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Liabilities: Current, Installment Notes, and Contingencies

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 71

True/False

Review LaterAdd Note

Review Later

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

​If a company borrows money from a bank as an installment note, the interest portion of each annual payment will

A) ​equal the interest rate on the note times the carrying amount of the note at the beginning of the period
B) ​remain constant over the term of the note
C) ​equal the interest rate on the note times the face amount
D) ​increase over the term of the note

Correct Answer

verified

Show Answer

Question 73

Multiple Choice

Review LaterAdd Note

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. The journal entry to record accrued payroll taxes would include a

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is

On June 8, Smith Technologies issued a $75,000, 6%, 140-day note payable to Johnson Company. What is the due date of the note?

The amount of money a borrower receives from the lender is called the discount rate.

A borrower has two alternatives for a loan: (a) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.) (a) Calculate the amount of the interest expense for each option. (b) Determine the proceeds received by the borrower in each situation.

During the first year of operations, a company granted warranties on its products at an estimated cost of $8,500. The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments.

For a current liability to exist, the liability must be due usually within a year and must be paid out of current assets.

The journal entry a company uses to record the estimated product warranty liability expense is

Which of the following is the most desirable quick ratio?

Aqua Construction installs swimming pools. It calculates that warranty obligations are 5% of sales. For the year just ending, Aqua's sales were $1,500,000. Previous quarterly entries debiting Product Warranty Expense totaled $48,700. Determine the estimated warranty expense for the year and make the journal entry necessary to bring the account to the needed balance.

Lee Company has the following information for the pay period of December 15-31: $\begin{array} { l r l r } \text { Gross payroll } & \$ 16,000 & \text { Federal income tax withheld } & \$ 4,000 \\\text { Social security rate } & 6 \% & \text { Federal unemployment tax rate } & 0.8 \% \\\text { Medicare rate } & 1.5 \% & \text { State unemployment tax rate } & 5.4 \%\end{array}$ Assuming no employees are subject to ceilings for taxes on their earnings, Salaries Payable would be recorded for

​The journal entry a company uses to record pension rights that have not been funded for its salaried employees at the end of the year is

Based on the following data, what is the quick ratio, rounded to one decimal point $\begin{array} { l r } \text { Accounts payable } & 30,000 \\\text { Accounts receivable } & 60,000 \\\text { Accrued liabilities } & 5,000 \\\text { Cash } & 30,000 \\\text { Intangible assets } & 50,000 \\\text { Inventory } & 69,000 \\\text { Long-term investments } & 80,000 \\\text { Long-term liabilities } & 100,000 \\\text { Marketable securities } & 30,000 \\\text { Fixed assets } & 670,000 \\\text { Prepaid expenses } & 1,000\end{array}$

Match each payroll item that follows to the one item that best describes its characteristics.

On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume that the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?

Match the explanations with the following terms or phrases. Terms or phrases may be used more than once.

On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note? When required, round your answer to the nearest dollar.

On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The note requires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The first payment consists of $6,250 interest and principal repayment of $15,352. ​ Journalize the following entries: (a) Issued the installment note for cash on January 1. (b) Paid the first annual payment on the note. ​