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Exam 9: Reporting and Analyzing Current Liabilities

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Question 1

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_________________ are probable future payments of assets or services that a company is currently obligated to make as a result of past transactions or events.

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Question 2

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______________________ is the total compensation an employee earns including wages,salaries,commissions,bonuses,and any compensation earned before deductions such as taxes.

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Question 3

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On October 10,2013,Printfast Company sells a commercial printer for $2,350 with a one-year warranty that covers parts.Warranty expense is projected to be 4% of sales.On February 28,2014,the printer requires repairs.The cost of the parts for the repair is $80 and Printfast pays their technician $150 to perform the repair. -What is the warranty liability for this printer at the end of 2013?

Known liabilities are obligations set by agreements,contracts,or laws and are measurable and definitely determinable.

A company's income before interest expense and income taxes is $302,400 and its interest expense is $72,000.Calculate the company's times interest earned ratio.

Payroll is usually paid with a check or with the use of an electronic funds transfer.

A liability does not exist if there is any uncertainty about whom to pay,when to pay,or how much to pay.

Coca-Cola had income before interest expense and income taxes of $5,698 million and interest expense of $199 million.Calculate Coca-Cola's times interest earned ratio.

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

An employee earned $47,000 during the year working for an employer.The FICA tax for social security is 6.2%,and the FICA tax for Medicare is 1.45%.The employee's share of FICA taxes is:

When the number of withholding allowances increases,the amount of income tax withheld increases.

Cooper Company borrows $785,100 cash on November 1,2013,by signing a 120-day,8% note.What amount of interest expense should Cooper recognize in 2013?

______________ are amounts owed to suppliers for products or services purchased on credit.

Social security payments are made up of Social Security taxes and Medicare taxes.

On June 1,2013,Martin Company signed a $25,000,120-day,6% note payable to cover a past due account payable.This company uses a calendar year to report financial activity. a.What is the total amount of interest to be paid on this note? b.Prepare Martin Company's general journal entry to record the issuance of the note payable, c.Prepare Martin Company's general journal entry to record the payment of the note on September 29,2013 assuming no adjusting entries have been made since this note was first issued.

Vacation benefits are a form of estimated liabilities for an employer.

Obligations not expected to be paid within one year (or the company's operating cycle if longer than one year) are reported as:

Maryland Company offers a bonus plan to its employees equal to 3% of net income.Maryland's net income is expected to be $960,000.The amount of the employee bonus expense is estimated to be

The Edgartown Company borrowed $480,000 on December 1,2014.The note,which is due in 60 days,included interest at 8%.The company's fiscal year ends on December 31.How would the company record the adjusting entry relating to this note at December 31,2014?

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is longer.