Exam 9: Current Liabilities and Long-Term Debt

Which of the following is NOT a requirement of a capital lease?

Bill Company had total assets of $560,000; total liabilities of $250,000; and total shareholders' equity of $310,000. Bill Company's debt ratio is:

Under IFRS, a __________ is a liability that has an uncertain timing or an uncertain amount.

The majority of a company's liabilities are estimated liabilities.

Casey Industries issues a $250,000, 6%, 20-year mortgage note to finance the purchase of a new building on Jan. 1, 2012. Payments of $9,375 are made on June 30 and December 31 of each year. Prepare the amortization schedule for the first 5 payments of this mortgage note. (Round amounts to nearest dollar when necessary.)

Operating lease payments are expenses to the lessee and revenue to the lessor.

Journalize the following annual bond interest payments on June 30: June 30 a. 10-year 8% $250,000 bond that sold for $300,000. June 30 b. 5-year 5% $300,000 bond that sold for $280,000. June 30 c. 5-year 10% $500,000 bond that sold for $500,000.

Atrium Co. sells appliances and offers a one-year warranty to repair or replace any products that are defective. While the company is certain that some products will be defective, they are not certain of the number or expected cost. Identify the category of the liability and explain how it should be classified on the balance sheet.

A company receives a note payable for $3,500 at 9% for 45 days. How much interest (to the nearest cent) will the customer owe using a 360-day year?

Both the formulas for current ratio and debt ratio use current liabilities in the computation.

A lessor is a person who gives/ grants a lease.

The rate of interest at which investors are willing to pay for similar bonds of equal risk at the current time is the __________ rate of interest.

John Company has current assets of $59,000; long term assets of $129,000; current liabilities of $31,000, and long-term liabilities of $83,000. Calculate John Company's current ratio and debt ratio.

Unearned revenues are typically classified as current liabilities.

A $25,000 bond issue with a stated interest rate of 5%, when the market rate of interest is 4%, means that the bond will sell for:

Rental agreements are typically:

An obligation resulting from an event that has not yet occurred is an example of a(n) __________.

If the bond's stated rate of interest is greater than the market rate of interest, the bond will be issued at __________.

Identify the classification error in the following partial Balance Sheet for Aztec Industries and determine the impact on the current ratio. Aztec Industries Balance Sheet-Partial

On June 1, Taylor Merchandising purchases inventory for $150,000. The company has sales of $300,000 during the month of June and estimates that 7% of its product sales will require warranty repairs. All purchases and sales are subject to 13% HST. Journalize the following: Inventory purchase (100% on account). Sales for June (60% on account, 40% in cash). Estimated dollars for warranties. Paid cash claims of $11,300 out of cash on July 31.