FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 9: Accounting for Current Liabilities and Payroll

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Seattle Company issued a $90,000 face value discount note payable to First Federal Bank on September 1, Year 1. The note had a 4% discount rate and a one-year term. What is the carrying value of the liability appearing on the December 31, Year 1 balance sheet?

A) $80,400
B) $87,600
C) $90,000
D) $88,800

E) B) and C)
F) A) and D)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Seattle Company issued a $90,000 face value discount note payable to First Federal Bank on September 1, Year 1. The note had a 4% discount rate and a one-year term. What is the effect of the accrual of interest expense on the financial statements?

A) Liabilities will increase and retained earnings will decrease.
B) Assets and liabilities will decrease.
C) Assets will increase and retained earnings will increase.
D) Liabilities will increase and assets will decrease.

E) C) and D)
F) All of the above

Correct Answer

verified

Show Answer

Question 33

Essay

Review LaterAdd Note

Wythe Company received proceeds of $141,000 from issuing a $150,000 face value discount note to Centennial Bank. The note had a one-year term to maturity. Required:a)What discount rate did the bank use?

Under what conditions should a pending lawsuit be recognized in a company's financial statements? Under what conditions should the lawsuit be disclosed in the notes to the financial statements?

Mr. Ortega earns a monthly salary of $4,000. Based on Mr. Ortega's Form W-4, the tax tables require withholding $450 per month for income taxes. Mr. Ortega has authorized his employer to deduct $190 per month for medical insurance and $15 per month for a charitable contribution to the Humane Society. Assume a FICA tax rate of 6%, a Medicare tax rate of 1.5%, and an Unemployment tax rate of 6% on the first $7,000 of income. Which of the following shows how recognizing the accrued payroll tax expense would affect the employer's financial statements?

During Year 1, its first year of operations, Benitez Company reported sales of $800,000. At the end of Year 1, the company estimated its warranty obligation at 3% of sales. During Year 1, the company paid $13,000 cash to settle warranty claims. Which of the following statements is true?

What is the current ratio used to evaluate?

Wilson Company earned $4,000 of cash sales. Sales tax is 6%. Which of the following shows how this event would affect the company's financial statements (ignore the effects of cost of goods sold) ?

Which of the following describes the effect of remitting the sales tax to the tax authority?

Greer Company pays Jamal Perry a salary of $3,000 per week. How much FICA tax must Greer pay with regards to this employee (including both the employee and employer portions) ? (Assume a Social Security rate of 6 percent on the first $110,000 of income and a Medicare rate of 1.5 percent on all earnings.)

What type of account is Discount on Notes Payable?

On September 1, Year 1, Wiggins Company issued a $66,000 note payable that had a one-year term and an annual interest rate of 8%. What amount of interest expense will be recognized on the income statement for Year 1 and for Year 2, respectively?

Which of the following is not an item deducted from salary expense to arrive at net pay?

Vogel Company purchased $8,000 of equipment by making a $500 down payment and issuing a note for the remainder. As a result of this event, assets increased by $8,000.

How is the current ratio calculated?

On December 31, Colfax Company recognized accrued interest expense in the amount of $1,500. The interest expense was related to a discount note that Colfax had issued earlier in the year.

Taylor Tools has sales of $400,000 in Year 1. Taylor warrants its products and estimates warranty expense to be 4% of sales. Which of the following shows how the year-end adjusting entry would affect the company's assets, liabilities, and cash flow from operating activities?

If a company pays cash to settle a customer's warranty claim, what is the effect on the accounting equation?

Which of the following terms describes the ability to generate short-term cash flows?

Issuing a note payable is a(n) :