Exam 9: Current Liabilities and Long-Term Debt

Livingston Organization had total assets of $635,000; total liabilities of $185,000; and total Stockholders' Equity of $450,000. Livingston's debt ratio is: (Round your final answer to the nearest whole number.)

Bonds that can be exchanged for stock are called:

Capital leases are most similar to:

Warranty expense is always recorded in the period that the warranty claims are paid.

When a liability exists, the amount owed is always known.

With regard to long-term debt, collateral represents?

A company may use two payroll accounts as a control for efficiency.

During the month, Evergreen Roofing settled $600 in warranty claims by replacing the defective flashing. Evergreen uses an estimated warranty account. The journal entry to record the settled claims would have been:

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

TLR Productions reported Interest expense of $9,000, Income tax expense of $27,000 and Net income of $110,000. TLR's interest coverage ratio is: (Round your final answer to two decimal places.)

FUTA is paid by the employer on:

Sydney earns $15 per hour and works 40 hours a week. Last week she worked 50 hours; given that her company pays time and a half for overtime-what is Sydney's gross pay for the week? (Assume overtime is any time over 40 hours per week. Round intermediary calculations and your final answer to the nearest cent.)

KLR Oil Company is being investigated, following an explosion on one of their oil rigs. They have multiple prior citations for safety violations, and this explosion killed several workers. The related damages are still unknown and cannot be reasonably estimated. What accounting treatment should KLR use for the investigation?

Unearned revenues are typically classified as current liabilities.

Cypress Corp. had sales on account of $19,500 which were subject to state sales tax of 12%. The entry to record the sales would be to:

Salary is pay stated at an hourly rate.

Making a payment on an account would be journalized with a debit to Accounts Payable and credit to Cash.

By NOT accruing warranty expense:

Notes payable would be an example of a known liability.

A transaction, such as a utility bill to be paid in 30 days, would be journalized with a debit to Utilities expense and a credit to Notes payable.