Question
Problem 10.1A Effects of Transactions on Financial Statements L.O. 1, 2, 3, 4, 5, 6, 8 Fifteen transactions or events affecting Computer Specialists, Inc., are
Problem 10.1A Effects of Transactions on Financial Statements L.O. 1, 2, 3, 4, 5, 6, 8
Fifteen transactions or events affecting Computer Specialists, Inc., are as follows: |
a. | Made a year-end adjusting entry to accrue interest on a note payable. | |||||||||||||||||||||||||||||||||||||||||
b. | A liability classified for several years as long-term becomes due within the next 12 months. | |||||||||||||||||||||||||||||||||||||||||
c. | Recorded the regular biweekly payroll, including payroll taxes, amounts withheld from employees, and the issuance of paychecks. | |||||||||||||||||||||||||||||||||||||||||
d. | Earned an amount previously recorded as unearned revenue. | |||||||||||||||||||||||||||||||||||||||||
e. | Made arrangements to extend a bank loan due in 60 days for another 18 months. | |||||||||||||||||||||||||||||||||||||||||
f. | Made a monthly payment on a fully amortizing installment note payable. (Assume this note is classified as a current liability.) | |||||||||||||||||||||||||||||||||||||||||
g. | Called bonds payable due in seven years at a price above the carrying value of the liability in the accounting records. | |||||||||||||||||||||||||||||||||||||||||
h. | Issued bonds payable at 97 on May 1, 2011. The bonds pay interest May 1 and November 1. | |||||||||||||||||||||||||||||||||||||||||
i. | Recorded November 1, 2011, interest expense and made semiannual interest payment on bonds referred to in part h. | |||||||||||||||||||||||||||||||||||||||||
j. | Recorded necessary adjusting entry on December 31, 2011, for bonds referred to in part h. | |||||||||||||||||||||||||||||||||||||||||
k. | Issued bonds payable at 102 on July 31, 2011. The bonds pay interest July 31 and January 31. | |||||||||||||||||||||||||||||||||||||||||
l. | Recorded necessary adjusting entry on December 31, 2011, for bonds referred to in part k. | |||||||||||||||||||||||||||||||||||||||||
m. | Recorded an estimated liability for warranty claims. | |||||||||||||||||||||||||||||||||||||||||
n. | Entered into a two-year commitment to buy all hard drives from a particular supplier at a price 10 percent below market. | |||||||||||||||||||||||||||||||||||||||||
o. | Received notice that a lawsuit has been filed against the company for $7 million. The amount of the company's liability, if any, cannot be reasonably estimated at this time.
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