Question
In: Accounting
17. Which of the following would appear on the statement of financial position as a current...
17. Which of the following would appear on the statement of financial position as a current liability?
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a. |
a probable loss in the amount of $4 million from an ongoing lawsuit |
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b. |
a possible loss in the amount of $4 million from an ongoing lawsuit |
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c. |
a probable loss from an ongoing lawsuit, the amount of which is not yet determinable |
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d. |
a lawsuit for $4 million for which the likelihood of loss is remote |
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18. Chastain Park Entertainment paid salaries expense of $350,000 during Year 1. However, additional salaries of $20,000 had been earned by employees, but not paid or recorded at December 31, Year 1. |
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Refer to Chastain Park Entertainment. Under the accrual basis of accounting, what is the total amount of salaries payable to be reported at December 31, Year 1?
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19. Fiona’s Italian Market purchased a delivery truck for $25,000 at the beginning of Year 1. The truck has an estimated life of five years and an estimated residual value of $5,000. The company plans to use the straight-line depreciation method. At the beginning of Year 2, the company spent $4,000 to replace the truck’s transmission. This resulted in a two-year extension of useful life, but no change in residual value. |
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Refer to Fiona’s Italian Market. What is the amount of depreciation expense for Year 2?
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20. On January 1, Year 1, Kaleidoscope Paint issued $500,000, 10-year, 9% bonds for $480,745. The bonds pay interest on June 30 and December 31. The market rate is 10%. The company plans to use the effective interest method of amortizing bond discounts and premiums. |
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Refer to Kaleidoscope Paint. What will be the cash payment on June 30, Year 1?
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21. Selected financial data for Rescue Rooter are presented
below:
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Refer to Rescue Rooter. What does the debt-to-equity ratio for Year 2 indicate?
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22. Dietz Inc. sells merchandise on credit. If a customer pays its balance due within the discount period, what is the effect of the payment on Dietz’s accounting equation, assuming the sale has already been appropriately recorded?
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a. |
Assets and shareholders’ equity decrease. |
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b. |
Assets and shareholders’ equity increase. |
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c. |
Assets decrease and liabilities increase. |
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d. |
Shareholders’ equity decreases and liabilities increase. |
Solutions
Expert Solution
| Qns-17 | Option b - A possible loss in the amount | ||||||||
| of $4 million from an ongoing lawsuit. | |||||||||
| As loss amount is possible and certain so it needs to be shown | |||||||||
| in current liabilites. | |||||||||
| Qns-18 | Option b - $ 20000 is correct. | ||||||||
| Since salary is earned by employees but not recored or paid so it | |||||||||
| needs to be shown as salary payable under accural basis of | |||||||||
| accounting. | |||||||||
| Qns-19 | Option b - $ 3333 is correct. | ||||||||
| Below is working - | |||||||||
| Truck purchase price | 25,000 | ||||||||
| Residual price | 5,000 | ||||||||
| Net price | 20,000 | ||||||||
| Year 1 | Depreciation/year | 4,000 | |||||||
| Transmission cost | 4,000 | ||||||||
| Truck revised value | 25000+4000 | ||||||||
| Truck revised value | 29,000 | ||||||||
| Depreciation till date | 4,000 | ||||||||
| Residual price | 5,000 | ||||||||
| remaining life | 6 | ||||||||
| Year 2 | Depreciation/year | (Revised value - residual price - Depreciation till date) / remaining life | |||||||
| Depreciation/year | (29000-5000-4000)/6 | ||||||||
| Depreciation/year | 3,333 | ||||||||
| Option B is correct | 3,333 | ||||||||
| Qns-20 | 9% Bond Face Value | $500,000 | |||||||
| Interest Payment | |||||||||
| 30-Jun | 500000*9%/2 | $22,500 | |||||||
| 31-Dec | 500000*9%/2 | $22,500 | |||||||
| Option A - $ 22500 is correct. | |||||||||
| Qns-21 | Total equity | ||||||||
| Year 1 | $ 505,000 | ||||||||
| Year 2 | $ 555,000 | ||||||||
| Debt | |||||||||
| Year 1 | $ 447,000 | ||||||||
| Year 2 | $ 650,000 |
 ekkarill92 answered 1 year agoRelated Solutions17. Which of the following would appear on the statement of financial position as a current...
17. Which of the following would appear on the statement of
financial position as a current liability?
a.
a probable loss in the amount of $4 million from an ongoing
lawsuit
b.
a possible loss in the amount of $4 million from an ongoing
lawsuit
c.
a probable loss from an ongoing lawsuit, the amount of which is
not yet determinable
d.
a lawsuit for $4 million for which the likelihood of loss is
remote
18. Chastain Park Entertainment paid...
Indicate all of the costs that would appear under Non-Current Assets on the Statement of Financial...Indicate all of the costs that would appear under
Non-Current Assets on the Statement of Financial
Position:
a. Development costs for new products which conform to the six
criteria for capitalization.
b. New driveway to the office building.
c. Costs to register trademarks.
d. Estimated reclamation costs (asset retirement costs) for a
gas well to be paid at the end of the well's life.
e. Repair and maintenance costs for new equipment.
f. Costs for repainting the office.
g. Amounts...
Hyrkas Corporation's most recent balance sheet and income statement appear below: Statement of Financial Position...
Hyrkas Corporation's most recent balance sheet and income
statement appear below:
Statement of Financial Position
December 31, Year 2 and Year 1
(in thousands of dollars)
Year 2
Year 1
Asset:
Current assets:
Cash
$
100
$
110
Accounts receivable
210
220
Inventory
110
120
Prepaid expenses
10
10
Total current assets
430
460
Plant and equipment, net
900
880
Total assets
$
1,330
$
1,340
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
160
$
170
Accrued...
The financial statements of Morgan Ltd appear below: Morgan LTD Comparative Statement of Financial Position 31...The financial statements of Morgan Ltd appear below:
Morgan LTD
Comparative Statement of Financial Position
31 December 2018
________________________________________________________________________________________
Assets
2018
2017
Cash
..................................................................................................
$
25,000
$ 40,000
Marketable securities
...........................................................................
15,000
60,000
Accounts receivable (net)
.....................................................................
50,000
30,000
Inventory
............................................................................................
150,000
170,000
Property, plant and equipment (net)
......................................................
160,000
200,000
Total assets
..................................................................................
$400,000 $500,000
Liabilities and equity
Accounts payable
................................................................................
$
20,000
$ 30,000
Short-term notes payable
.....................................................................
40,000
90,000
Bonds payable...
The current assets and current liabilities sections of the statement of financial position of Monty Corp....The current assets and current liabilities sections of the
statement of financial position of Monty Corp. are as
follows:
MONTY CORP.
Statement of Financial Position (partial)
December 31, 2020
Cash
$43,000
Accounts payable
$62,000
Accounts receivable
$95,000
Notes payable
68,000
Allowance for doubtful accounts
7,800
87,200
Inventory
186,600
Prepaid expenses
9,500
$326,300
$130,000
The following errors have been discovered in the corporation’s
accounting:
1.
January 2021 cash disbursements that were entered as at
December 2020 included payments of accounts payable...
Which of the following is a source of cash that would appear on the statement of...Which of the following is a source of cash that would appear on
the statement of cash flows?
decrease in notes payable
increase in gross fixed assets
increase in accrued expenses
On 30 June 2018, the Statement of Financial Position of Emerald Ltd showed the following non-current...On 30 June 2018, the Statement of Financial Position of Emerald
Ltd showed the following non-current asset after charging
depreciation:
Plant
400,000
Accumulated Depreciation
(150,000)
250,000
As of 30 June 2018, the company decided to adopt the revaluation
model for the plant. Therefore, on 30 June 2018, an independent
valuer assessed the fair value of the plant to be $280,000 with a
remaining useful life of 7 years.
On 30 June 2019, the plant was revalued again to its fair...
On 30 June 2018, the Statement of Financial Position of Emerald Ltd showed the following non-current...On 30 June 2018, the Statement of Financial Position of Emerald
Ltd showed the following non-current asset after charging
depreciation:
Plant
400,000
Accumulated Depreciation
(150,000)
250,000
As of 30 June 2018, the company decided to adopt the revaluation
model for the plant. Therefore, on 30 June 2018, an independent
valuer assessed the fair value of the plant to be $280,000 with a
remaining useful life of 7 years.
On 30 June 2019, the plant was revalued again to its fair...
The statement of financial position of KY Limited at 31 December 2019 shows the following. Non-current...The statement of financial position of KY Limited at
31 December 2019 shows the following. Non-current assets GH₵
1,350,000; current assets GH₵ 140,000; ordinary share capital GH₵
900,000; general reserve GH₵ 150,000; 10% debentures GH₵ 200,000;
current liabilities GH₵ 90,000; retained earnings GH₵ 150,000 The
profit from operations for the year was GH₵ 65 000 and the finance
costs were GH₵ 20 000. What is the return on capital employed for
2019?
A. 3.21%
B. 4.64%
C. 5.7%
D. 5.91%...
Ayayai Corp.’s statement of financial position at the end of 2019 included the following items: Current...Ayayai Corp.’s statement of financial position at the end of
2019 included the following items:
Current assets
$1,115,000
Current liabilities
$1,027,100
Land
30,100
Bonds payable
1,111,000
Buildings
1,130,000
Common shares
181,000
Equipment
321,000
Retained earnings
175,000
Accumulated depreciation—buildings
(131,000
)
Accumulated depreciation—equipment
(11,100
)
Intangible assets—patents
40,100
Total
$2,494,100
Total
$2,494,100
The following information is available for the 2020 fiscal
year:
1.
Net income was $392,000.
2.
Equipment (cost of $20,100 and
accumulated depreciation of $8,010) was sold for $10,100....
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