within one year and long-term liabilities are one Chapter 8 payable more 1 r F Commy le than one year from now would prefer to report a liability as current rather than to as 2. T F Given a choice, most companies because it may cause the firm to appear less risky. is referred to as borrows from another company rather than from a bank, the note 3 TF Ita company customers by the seller are not an expense, instead they represent from collected 4 T F Sales taxes current lablities payable to the government. F The balance in the estimated warranty liability account is always equal to warranty can be reasonable estimated 6. TF We record gain contingencies when the gain is probable and 7. An employee has gross eamings of $1,600 and withholdings of $25 for income taxes, S5 for socia security of this employee security taxes and $3 for medicare taxes. The employer also pays a total of $5 for social and $3 for medicare taxes, $12 for FUTA and $2 for SUTA What is the total cost to the employer? Assume no other information 15 8. Which of the following is not a liability? a An unused line of credit c. Sales tax collected from customers b. Current portion of long-term debt d. Unearned revenues 9. On December 11, 2015, Jaron Co received magazine subscriptions for 2016 in cash for $200. Make the entry to record the receipt of this cash in 2015. Cash 10. If you buy lunch for $16.35 that includes 9% sales tax, how much did the restaurant charge you for lunch and how much do they owe for sales taxes? Sales Th 1,25 11. United Supply has a $25 million liability at December 31, 2015, of which $5 million is payable in each df the next five years. What portion of the $25 million is current and what amount is long term at 12/31/15? Current 12. For each of the following, determine the correct way to treat the situation: i.e. record in the books, disclosure required or no reporting needed and any amount that is to be reported or disclosed. a. The likelihood of a payment occurring is probable, and the estimated amount is $1.3 million b. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.1 million to $1.6 million t.l million tecor del Dicelssure