Study sets, textbooks, questions
Upgrade to remove ads
Ch 10: Reporting and Analyzing Liabilities
Terms in this set (20)
A company receives $198, $13 of which is for sales tax. The journal entry to record the sale would include a
credit to Sales Taxes Payable for $13.
Liabilities are classified on the balance sheet as current or
What is a note payable?
a written promissory note
From a liquidity standpoint, which is more desirable for a company to have?
current assets exceed current liabilities
Maggie Sharrer Company borrows $88,500 on September 1, 2017, from Sandwich State Bank by signing an $88,500, 12%, one-year note. What is the accrued interest at December 31, 2017?
Becky Sherrick Company has total proceeds from sales of $4,515. If the proceeds include sales taxes of 5%, the amount to be credited to Sales Revenue is
By computing the present value of the principal paid at maturity and all interest payments to be made over the term of the bond, you can obtain the ________ of bonds.
If a company wants to reserve the right to purchase their issued bonds back from the bondholder, they should issue ________ bonds.
Keck Industries is planning to issue $7 million in bonds with a six-year maturity date and an annual rate of 5.4 percent. How much will they pay in interest over the life of the bonds?
Interest over the life of the bonds will be $7 million
6 = $2,268,000.
When a bond is issued for more than its face value, the market rate of interest is ________ the interest rate stated on the bond.
The carrying value of bonds is another term for
If $400,000 bonds are issued on January 1 and pay $24,000 interest annually, what is the rate of interest?
Bent Corporation issues 500, 10-year, 6%, $4,000 bonds dated January 1, 2017, at 96. The journal entry to record the issuance will show a
debit to Cash for $1,920,000.
Jordan Corporation issues 100, 5-year, 8%, $2,000 bonds dated January 1, 2017, at 96. The journal entry to record the issuance will show a
debit to Cash for $192,000.
Corn Flake Corporation reported net income of $300,000. Interest expense was $40,000 and income taxes were $100,000. The times interest earned ratio was
An investor knows the total assets and total liabilities of a company, but they are not sure how much of the assets and liabilities are current versus long-term. Based on this, the investor could calculate
the company's solvency but not their liquidity.
Justice Enterprises has current assets of $593 million and current liabilities of $316 million. What is their current ratio?
The current ratio is calculated as current assets divided by current liabilities. Therefore, the current ratio is $593 million/$316 million = 1.88:1.
What is one difference between the current ratio and the times interest earned ratio?
The current ratio measures a company's ability to meet short-term obligations, and the times interest earned ratio measures a company's ability to meet long-term obligations.
When will the carrying value of bonds equal the market price?
on the date of issuance
What is the difference between the contractual interest rate and the market interest rate?
The contractual interest rate is used to determine the actual amount of cash interest the issuer pays and the investor receives, whereas the market interest rate is the general rate investors demand for loaning funds.
Recommended textbook explanations
Krugman's Economics for AP*
David Anderson, Margaret Ray
Solutions Manual to Accompany Essentials of Investments
Alan J. Marcus, Alex Kane, Zvi Bodie
Principles of Microeconomics
N. Gregory Mankiw
Operations and Supply Chain Management
F Jacobs, Richard Chase
Sets found in the same folder
Acct Exam 2 Chapter 5
Acct Exam 2 Chapter 7
Orion Ch 8: Reporting and Analyzing Receivables
Ch 8 Orion
Sets with similar terms
Ch. 8+9 Liabilties
Chapter 10 self-test (ACCT220)
Other sets by this creator
EXAMINATION #1 STUDY GUIDE
HRM 360 - Chapter 1 - 5: Exam
MGMT 300 PRACTICE TEST
Ch. 1: Marketing
Other Quizlet sets
Lecture 1 BIO 102 quiz 1
Unit 1 Test, part 3
Bio Membrane Transport Test extended response