FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Accounting for Liabilities

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 131

Multiple Choice

Review LaterAdd Note

Review Later

When a bond sells at a discount,its stated interest rate is ________.

A) equal to the market rate of interest
B) greater than the market rate of interest
C) less than the market rate of interest
D) irrelevant to investors

Correct Answer

verified

Show Answer

Question 132

Essay

Review LaterAdd Note

Review Later

Bank,Rupp & Baroque,Inc.borrowed $100,000 at 6% for two years,to be repaid in equal monthly installments over the life of the loan.Calculate the amount of the monthly payments.

Correct Answer

verified

To calculate monthly payments,...

View Answer

Show Answer

Question 133

Multiple Choice

Review LaterAdd Note

On October 31,2011,Bondable,Inc.issued $20,000 of 10-year,6% bonds at 100.The bonds pay interest annually on October 31.On its statement of cash flows for the year ended December 31,2011,Bondable will show Cash paid for interest of ________.

On January 1,2011,Alpha Company issued $1,000,000 of 5%,20-year bonds to buy a new computerized accounting system.The market rate of interest was 6%.The bonds pay interest annually on December 31.To calculate the amount of cash that Alpha received,you must find ________.

Show the effect on the accounting equation of: a.)purchasing the truck by signing a $35,000 installment note and b.)the entry to record the first payment. c.Will leasing the truck require different entries? d.Is it ethical for a company to acquire the use of assets by renting them?

On November 1,2011,The Mane Event,Inc.borrowed $40,000 from a local bank for 24 months at 11% annual interest.Both principal and interest are due when the note matures.Which statement below is TRUE?

Beau Brentley earned $60,000 in 2011 from his job at Bridgestone Tires.He had 15% of his gross pay withheld for federal income taxes,6.2% withheld for FICA Social Security taxes,and 1.45% withheld for Medicare taxes.What amount will Bridgestone Tires report as payroll tax expense when it pays these taxes?

Bank,Rupp & Baroque,Inc.borrowed $100,000 at 6% for two years,to be repaid in equal monthly installments over the life of the loan.Calculate the total amount of interest Bank,Rupp & Baroque will pay on this loan.

If a bond is sold at a premium,the carrying value reported on the balance sheet in subsequent years ________.

Use the following information taken from a financial website to answer the following question(s) : -Refer to the information above.Is the carrying value of Ford MTR's bonds higher or lower than the face value of its bonds?

The risk associated with debt is risk to ________.

ABC Company borrows $15,000 from a local bank for six months at 9% annual interest.Which statement below is TRUE?

Discounting means trying to negotiate a cheaper interest rate for a loan.

Bondholders are considered owners of a company.

Ken's Kandy prepared the following preliminary balance sheet a few days before its December 31 yearend: Ken is concerned about the size of the accounts payable in relation to the company's cash and other current assets.He asks the accountant to reclassify $3,000 of the accounts payable as long-term notes payable before releasing the annual report on December 31. a.What is the company's current ratio now,based on the preliminary balance sheet? The formula for calculating the current ratio is current assets / current liabilities. b.What will the company's current ratio be if $3,000 of the accounts payable are reclassified as long-term notes payable? c.Will reclassifying the accounts payable have any effect on the debt-to-equity ratio? Explain. d.Is it ethical to reclassify current liabilities as long-term liabilities,as long as total liabilities are correct?

On January 1,2011,Ace Electronics borrowed $40,000 on a five-year,7% note.The loan will be repaid in 5 equal installments of $9,756 each year,beginning on December 31,2011.Notes payable at December 31,2012 will be ________ notes payable at December 31,2011.

The debt-to-equity ratio ________.

In December 2010,Bob Cratchit worked for Scrooge & Marley and earned $1,000.Federal income tax withholding is 10%.The FICA rate is 6.2% and the Medicare tax is 1.45%.What is Bob's net pay?

Beau Brentley earned $60,000 from his job at Bridgestone Tires.He had 15% of his gross pay withheld for federal income taxes,6.2% withheld for FICA Social Security taxes,and 1.45% withheld for Medicare taxes.What was Beau's net pay?

An employee's gross pay is recorded as an expense on the employer's books.