26. Rollins Corporation has the following assets and liabilities: Cash $4,000 Accounts Receivable 5,000 Investment in Trading Securities 8,000 Equipment 7000 Salaries Payable 2000 Interest Payable 1,000 Uneamed Revenue 3,000 Bonds Payable 9,000 Compute Rollins' current ratio. a. 1.60 b. 4.00 c. 1.13 d. 2.83 e. 1.33 27. When inventory is purchased on credit with terms FOB shipping point: a. the buyer reports the liability when the goods leave the seller's place of business. b. the buyer reports the liability when the goods reaches the buyer's place of business. c the buyer receives discount if payment is made before the goods leave the seller's place of business. d. the seller bears the insurance expense of goods during transit. e. the seller reports the inventory after the goods reach the buyer's place of business. 28. On January 1, 20X4, Franklin Corporation borrowed $40,000 yat a 6 percent annual interest rate for 3 years with payment to be made at the end of each year. On March 31, Franklin prepared its quarterly statements. Interest payable should be credited for: a. $2,400. b. $800. C. $400. d. $600. e. $200. 29. Yates Company borrowed $20,000 from Eastern Bank on November 1, 20x3 at an interest rate of 6 percent. No entries related to interest on loan were made prior to December 31, 20X3, when Yates Company prepared financial statements. On that date, Yates' accountant debited interest expense and credited interest payable for $100. Which of the following is true of this transaction? a. Liabilities are overstated. b. Assets are understated. c. Net income is understated. d. Retained earnings are overstated. e. Revenues are understated