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

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Question 21

Multiple Choice

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​If a company borrows money from a bank as an installment note,the interest portion of each annual payment will

A) ​equal the interest rate on the note times the carrying amount of the note at the beginning of the period
B) ​remain constant over the term of the note
C) ​equal the interest rate on the note times the face amount
D) ​increase over the term of the note

E) B) and D)
F) A) and B)

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Question 22

True/False

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For proper matching of revenues and expenses,the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

A) True
B) False

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Question 23

Multiple Choice

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During its first year of operations,a company granted employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000.The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years.What is the total cost of vacation pay and pension rights to be recognized in the first year?

​An installment note is a debt that requires the borrower to make equal periodic payments to the lender for the term of the note.

Current liabilities are due

For Company A and Company B: ​

In a defined benefits plan,the employer bears the investment risks in funding a future retirement income benefit.

Assuming a 360-day year,when a $20,000,90-day,5% interest-bearing note payable matures,total payment will be

Assuming a 360-day year,the interest charged by the bank,at the rate of 6%,on a 90-day,discounted note payable of $100,000 is

An interest-bearing note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

Kelly Howard has the following transactions.Prepare the journal entries. ​ ​

Payroll taxes are based on the employee's net pay.

Salaries Payable would be recorded in the amount of

Amounts withheld from each employee for social security and Medicare vary by state.

The Crafter Company has the following assets and liabilities: ​ ​ Determine the quick ratio (rounded to one decimal point) .

An employee receives an hourly rate of $15,with time and a half for all hours worked in excess of 40 during the week.Payroll data for the first week of the calendar year are as follows: hours worked,46; federal income tax withheld,$110; Social security tax rate,6%; and Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; federal unemployment compensation tax,0.8% on the first $7,000.What is the net amount to be paid to the employee? If required,round your answers to the nearest cent.

Proper payroll accounting methods are important for a business for all the reasons below except

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is reasonably possible but amount is not estimable

Journalize the following transactions for Riley Corporation:

Lee Company has the following information for the pay period of December 15-31: ​ ​ Assuming no employees are subject to ceilings for taxes on their earnings,Salaries Payable would be recorded for