1.In accounting for a contingent liability, if the likelihood of the obligation is probable and the amount can be estimated, a company must report the
1.In accounting for a contingent liability, if the likelihood of the obligation is probable and the amount can be estimated, a company must
report the liability on the balance sheet.
provide disclosure in the footnotes to the financial statements.
not recognize the liability until it is certain and the exact amount is known.
do nothing.
On January 2, 2014, the Hoover Corporation issued 44,000 shares of $10 stated-value common stock for $30.00 per share. Which of the following statements is true?
The Cash account will increase by $880,000.
The Common Stock account will increase by $1,320,000.
The Paid-in Capital in Excess of Stated Value account will increase by $880,000.
The Stock Payable account will increase by $1,320,000.
At the end of the accounting period, Isaac Company had a balance of $4,000 in its common stock account, additional paid in capital of $4,000, retained earnings of $3,000, and $1,000 of treasury stock. The total amount of stockholders' equity is:
$10,000.
$13,000.
$12,000.
$8,000.
Madison Co. paid dividends of $3,000; $6,000; and $10,000 during 2012, 2013 and 2014 respectively. The company had 500 shares of preferred stock outstanding with a $10 per share cumulative dividend. The amount of dividends received by the common shareholders during 2014 would be:
$6,000.
$5,000.
$3,000.
$4,000.
On January 1, 2014, Hays Corporation arranged a $3,000 line of credit with the Barnett Bank. It agreed to accept the bank's offer of 1% above the prime rate with Interest payments on December 31 of each year. All borrowings and payments on principal are to take place on January 1 of each year. Hays began its loan transactions with Barnett Bank by borrowing $1,000 on January 1, 2014. Which of the following answers shows the effect of this event on the financial statements? Cash A) B) C) D) Assets 1000 1000 1000 1000 Liabilities + Equity Revenue 1000 + NA NA NA + 1000 1000 1000 + NA NA 1000 + NA NA Expenses NA NA NA NA Net Inc NA 1000 NA NA 1000 IA 1000 IA 1000 OA 1000 FA O Choice A O Choice B O Choice C Chalcon On January 1, 2014, Hays Corporation arranged a $1,000 line of credit with the Barnett Bank. It agreed to accept the bank's offer of 1% above the prime rate with Interest payments on December 31 of each year. All borrowings and payments on principal are to take place on January 1 of each year. Hays paid the first year's interest payment on December 31, 2014. Barnett Bank's prime rate was 4 percent for 2014. Which of the following answers shows the effect of this event on the financial statements? Assets (50) (50) (40) (40) A) B) C) D) Liabilities (50) NA (40) NA + + + + + Equity NA (50) NA (40) Revenue NA NA NA NA . Expenses NA 50 . NA . 40 - Net Inc NA (50) NA (40) Cash (50) FA (50) OA (40) FA (40) OA = = O Choice A Choice B Choice C Cholce D On January 1, 2012, Hays Corporation arranged a $3,000 line of credit with the Barnett Bank and borrowed $1,000. It agreed to accept the bank's offer of 1% above the prime rate with Interest payments on December 31 of each year. All borrowings and payments on principal are to take place on January 1 of each year. On January 1, 2013, Hays borrowed an additional $1,000 from Barnett Bank, bringing the total amount borrowed to $2,000. On January 1, 2014, Hays paid $500 on the principal of the loan. On December 31, 2014, Hays records the 2014 Interest payment. The prime rate for 2014 was 5 percent. Which of the following answers shows the effect of the 2014 Interest payment on the financial statements? A) B) Assets = Liabilities + Equity Revenue (75) (75) + NA NA (75) NA + (75) NA (90) (90) + NA NA (90) NA + (90) NA Expenses NA 75 NA 90 Net Inc. NA (75) NA (90) Cash (75) FA (75) OA (90) FA (90) OA D) O Choice A Choice B Choice C Choice D The following balance sheet Information is provided for Duke Company for 2014: Assets Cash Accounts receivable Inventory Prepaid expenses Plant and equipment, net of depreciation Land Total assets 5,400 15,500 18,000 1.600 20.200 19950 80,650 $ $ Liabilities and Stockholders' Equity Accounts payable Sakries payable Bonds payable (Due in 2020) Common stock, no par Retained earnings Total liabilities and stockholder' equity 4,500 11,500 19.000 30,000 15.650 80.650 $ What is the company's current ratio? 1.16 1.31 2.53 3.79 The following balance sheet Information was provided by O'Connor Company $ Assets Cash Accounts receivable Inventory 2014 4,000 $ 15,000 35,000 $ 2013 2,000 12,000 38.000 $ Assuming that net credit sales for the year 2014 totaled $270,000, what is the company's most recent accounts recevable turnover? 18 times 20 times 22.5 times 7.7 times The following balance sheet Information is provided for Apex Company for 2014: $ Assets Cash Accounts receivable Inventory Prepaid expenses Plant and equipment, net of depreciation Land Total assets 5,400 15,500 18,000 1,600 20.200 19950 80.650 $ $ Liabilities and Stockholders' Equity Accounts payable Sahries payable Bonds payable (Due in 2020) Common stock, no par Retained earnings Total liabilities and stockholder' equity 4,500 11,500 19.000 30,000 15,650 80,650 $ What is the company's working capital? $20,300 $4,900 $22.900 $24,500 The following balance sheet Information was provided by Western Company: S Assets Cash Accounts receivable Inventory 2014 4.000 S 15,000 35,000 $ 2013 2000 12.000 38,000 S Assuming 2014 net credit sales totaled $270,000, what was the company's average days to collect receivables? (Use 365 days in a year. Do not round your Intermediate calculations.) 18.25 days O 47.31 days 16.22 days 0 20.28 days The following balance sheet Information is provided for Gaynor Company: $ Assets Cash Accounts receivable Inventory 2014 4,000 $ 15,000 35,000 $ 2013 2,000 12,000 38,000 $ Assuming 2014 cost of goods sold is $153,300, what is the company's Inventory tumover? 4.0 times 4.4 times 4.2 times None of these answers is correct
