Exam 8: Current and Contingent Liabilities

On December 1,2019,Goliath Corporation borrowed $120,000 on a three-month,10% note.Goliath Corporation's year end is December 31. Required: 1.Prepare the journal entries in 2019 and 2020 for Goliath Corporation.Omit explanations. 2.At December 31,2019,what is reported on the balance sheet as current liabilities? 1. 2. Current Liabilities:

Mike's Pharmacy sold inventory with a selling price of $2,900 to customers for cash.They also collected sales taxes of $290.The journal entry to record this information includes a:

Short-term notes payable are notes payable due in more than one year.

Accounts payable turnover is an important measure of liquidity for a retail business.

Short-term notes payable to banks are often used to finance business operations.

On December 31st,Datton,Inc.has cost of goods sold of $550,000,ending inventory is $112,000,beginning inventory is $129,000;and average accounts payable is $107,000.What is the accounts payable turnover expressed as days? (Round any intermediary calculations to two decimal places,and round your final answer to the nearest day. )

To disclose a contingent liability means:

Large companies,like Amazon,typically pay most of their financing expenses through accounts payable.

Accounts payable turnover measures the number of times per day the company is able to pay its accounts payable.

Mariano Corporation sells 11,000 units of inventory during the first year of operations for $500 each.Mariano provides a one-year warranty on parts.It is estimated that 4% of the units will be defective and that repair costs are estimated to be $50 per unit.In the year of sale,warranty contracts are honored on 100 units for a total cost of $5,000.What amount will be reported as Estimated Warranty Liability at the end of the year?

The FASB provides guidelines to account for contingent liabilities by:

Some liabilities,such as accrued salaries and rent,are recognized at the end of the next accounting period in the form of adjustments to the financial statements.

Typically,the hard part about computing the accounts payable turnover is getting the:

A wage is employee pay at a monthly or yearly rate.

FICA tax includes:

A current liability would include all EXCEPT:

Short-term notes payable typically increase liabilities and equity.

To record the accrued interest on a note payable at the end of the accounting period,a journal entry should be written to credit:

Long-term liabilities are usually associated with:

A potential obligation that depends on the future outcome of past events is a contingent liability.