Question
17.Which of the following would appear on the statement of financial position as a current liability? a. a probable loss in the amount of $4
17.Which of the following would appear on the statement of financial position as a current liability?
| a. | a probable loss in the amount of $4 million from an ongoing lawsuit |
| b. | a possible loss in the amount of $4 million from an ongoing lawsuit |
| c. | a probable loss from an ongoing lawsuit, the amount of which is not yet determinable |
| d. | a lawsuit for $4 million for which the likelihood of loss is remote |
| ||||||||||||
| ||||||||||||
| ||||||||||||
18. Chastain Park Entertainment paid salaries expense of $350,000 during Year 1. However, additional salaries of $20,000 had been earned by employees, but not paid or recorded at December 31, Year 1. | ||||||||||||
Refer to Chastain Park Entertainment. Under the accrual basis of accounting, what is the total amount of salaries payable to be reported at December 31, Year 1?
|
19. Fionas Italian Market purchased a delivery truck for $25,000 at the beginning of Year 1. The truck has an estimated life of five years and an estimated residual value of $5,000. The company plans to use the straight-line depreciation method. At the beginning of Year 2, the company spent $4,000 to replace the trucks transmission. This resulted in a two-year extension of useful life, but no change in residual value. | ||||||||||||
Refer to Fionas Italian Market. What is the amount of depreciation expense for Year 2?
|
20. On January 1, Year 1, Kaleidoscope Paint issued $500,000, 10-year, 9% bonds for $480,745. The bonds pay interest on June 30 and December 31. The market rate is 10%. The company plans to use the effective interest method of amortizing bond discounts and premiums. | ||||||||||||
Refer to Kaleidoscope Paint. What will be the cash payment on June 30, Year 1?
|
21. Selected financial data for Rescue Rooter are presented below:
| |||||||||||||||
Refer to Rescue Rooter. What does the debt-to-equity ratio for Year 2 indicate?
|
22.Dietz Inc. sells merchandise on credit. If a customer pays its balance due within the discount period, what is the effect of the payment on Dietzs accounting equation, assuming the sale has already been appropriately recorded?
| a. | Assets and shareholders equity decrease. |
| b. | Assets and shareholders equity increase. |
| c. | Assets decrease and liabilities increase. |
| d. | Shareholders equity decreases and liabilities increase. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started