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

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Question 51

Multiple Choice

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Match the following terms or phrases in (a-g) with the explanations in 1-8.Terms or phrases may be used more than once. -Measures the "instant" debt-paying ability of a company

A) Current ratio
B) Working capital
C) Quick assets
D) Quick ratio
E) Record an accrual and disclose in the notes to the financial statements
F) Disclose only in notes to financial statements
G) No disclosure needed in notes to financial statements

H) A) and E)
I) A) and D)

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Question 52

Multiple Choice

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On June 1,Davis Inc.issued an $84,000,5%,120-day note payable to Garcia Company.Assume that the fiscal year of Garcia ends June 30.Using a 360-day year,what is the amount of interest revenue recognized by Garcia in the following year? When required,round your answer to the nearest dollar.

A) $700
B) $1,600
C) $1,062
D) $4,200

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

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Question 53

Multiple Choice

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​On January 1,Gemstone Company obtained a $165,000,10-year,7% installment note from Guarantee Bank.The note requires annual payments of $23,492,with the first payment occurring on the last day of the fiscal year.The first payment consists of interest of $11,550 and principal repayment of $11,942.The journal entry to record the issuance of the installment note for cash on January 1 would include a

The cost of a product warranty should be included as an expense in the

Payroll taxes levied against employees become liabilities

On January 5,Thomas Company,a calendar-year company,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Which of the following would be used to compute the federal income taxes to be withheld from an employee's earnings?

Notes may be issued

Which is not a determinate in calculating federal income taxes withheld from an individual's pay?

Use the following information and calculate the quick ratio for Davis Company and for Bender Inc. ​ ​

Which of the following will have no effect on an employee's take-home pay?

Roseland Design borrowed $700,000 on a 90-day note from CorpOne Funding Company.CorpOne discounts the note at 8%.(Assume a 360-day year is used for interest calculations.)

A pension plan that promises employees a fixed annual pension benefit,based on years of service and compensation,is called a(n)

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.

On October 1,Ramos Co.signed a $90,000,60-day discounted note at the bank.The discount rate was 6%,and the note was paid on November 30.(Assume a 360-day year is used for interest calculations.)

Zennia Company provides its employees with varying amounts of vacation per year,depending on the length of employment.The estimated amount of the current year's vacation cost is $135,000.On December 31,the end of the current year,the current month's accrued vacation pay is

The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

Journalize the following entries on the books of Winston Co.for August 1,September 1,and November 30.(Assume a 360-day year is used for interest calculations.)

Martin Jackson receives an hourly wage rate of $30,with time and a half for all hours worked in excess of 40 hours during a week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$350; social security tax rate,6.0%; and Medicare tax rate,1.5%.What is the net amount to be paid to Jackson?

The journal entry to record the payment of an interest-bearing note is