Exam 10: Liabilities

Ed's Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Ed's Bookstore make to show the April remittance?

Interest expense is reported under Other Expenses and Losses in the income statement.

Sales taxes collected by a retailer are reported as

On December 1, Gilman Corporation borrowed $20,000 on a 90-day, 6% note. Prepare the entries to record the issuance of the note, the accrual of interest at year end, and the payment of the note.

A retail store credited the Sales Revenue account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the Sales Revenue account amounted to $294,000, what is the amount of the sales taxes owed to the taxing agency?

215. A corporation issued $600,000, 10%, 7-year bonds on January 1, 2018 for $648,666, which reflects an effective-interest rate of 7%. Interest is paid annually on January 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on December 31, 2018, is

A cash register tape shows cash sales of $1,800 and sales taxes of $126. The journal entry to record this information is

Sales taxes collected by a retailer are recorded by

During the month, a company sells goods for a total of $108,000, which includes sales taxes of $8,000; therefore, the company should recognize $100,000 in Sales Revenues and $8,000 in Sales Tax Expense.

On January 1, 2018, $2,000,000, 10-year, 10% bonds, were issued for $1,946,000. Interest is paid annually on January 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the monthly amortization amount is

As interest is recorded on an interest-bearing note, the Interest Expense account is

Hibbett Company does not segregate sales and sales taxes on its cash register. Its register total for the month is $312,700, which includes a 6% sales tax. Instructions Compute sales taxes payable, and make the entry to record sales and sales taxes payable.

Hardy Company has current assets of $95,000, current liabilities of $100,000, long-term assets of $180,000 and long-term liabilities of $80,000. Hardy Company's working capital and its current ratio are:

A bond with a face value of $200,000 and a quoted price of 102¼ has a selling price of

Bonds may be redeemed (retired) before maturity by the issuing corporation. Explain why a company would decide to retire bonds before maturity and the necessary steps to record the redemption.

Kim Estes and Jeff Malone are discussing how the market price of a bond is determined. Kim believes that the market price of a bond is solely a function of the amount of the principal payment at the end of the term of a bond. Is she right? Discuss.

On October 1, 2017, Pennington Company issued a $90,000, 10%, nine-month interest-bearing note. Assuming interest was accrued in June 30, 2018, the entry to record the payment of the note on July 1, 2018, will include a:

Ranger Corporation reports the following amounts in their 2018 financial statements: Instructions (a) Compute the December 31, 2018, balance in stockholders' equity. (b) Compute the debt to assets ratio at December 31, 2018. (c) Compute times interest earned for 2018.

Which of the following is usually not an accrued liability?

A bond secured by specific assets set aside to redeem the bonds is called a