Chapter 11: Q1RQ (page 603)
What are the three main characteristics of liabilities?
Liability is amonetary burdenon an individual or a business entity that will be paid in the future.
Over 22 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
Coltrane Company has a \(5,000 note payable that is paid in \)1,000 instalments over five years. How would the portion that must be paid within the next year be reported on the balance sheet?
Consider the following note payable transactions of Creative Video Productions. 2017 Aug. 1 Purchased equipment costing $16,000 by issuing a one-year, 9% note payable. Dec. 31 Accrued interest on the note payable. 2018 Aug. 1 Paid the note payable plus interest at maturity. Journalize the transactions for the company.
What are the two main controls for payroll? Provide an example of each.
Question:The income statement for Vermont Communications follows. Assume VermontCommunications signed a 3-month, 3%, \(6,000 note on June 1, 2018, and that thiswas the only note payable for the company.
Vermont Communications | ||
Income Statement | ||
Year Ended July 31, 2018 | ||
Net Sales Revenue | \) 26,500 | |
Cost of Goods Sold | 12,200 | |
Gross Profit | 14,300 | |
Operating Expenses: | ||
Selling Expenses | \( 690 | |
Administrative Expenses | 1,550 | |
Total Operating Expenses | 2,240 | |
Operating Income | 12,060 | |
Other Income and (Expenses): | ||
Interest Expense | ? | |
Total Other Income and (Expenses) | ? | |
Net Income before Income Tax Expense | ? | |
Income Tax Expense | 2,410 | |
Net Income | \) ? | |
Requirements
1. Fill in the missing information for Vermont’s year ended July 31, 2018, incomestatement. Round to the nearest dollar.
2. Compute the times-interest-earned ratio for the company. Round to twodecimals.
Rios Raft Company had the following liabilities.
a. Accounts Payable
b. Note Payable due in 3 years
c. Salaries Payable
d. Note Payable due in 6 months
e. Sales Tax Payable
f. Unearned Revenue due in 8 months
g. Income Tax Payable
Determine whether each liability would be considered a current liability (CL) or a long-term liability (LTL).
What do you think about this solution?
We value your feedback to improve our textbook solutions.
