70.2K

Verified Solution

Link Copied!

Madison Company issued an interest-bearing note payable with a face amount of $12,000 and a stated interest rate of 8% to the Metropolitan Bank on August 1, Year 1. The note carried a one-year term. The amount of cash flow from operating activities on the Year 1 statement of cash flows would be: Mulipie Choice $960. $400 $12,000 Which of the following represents the impact of a taxable cash sale of $500 on the accounting equation if the sales tax rate is 4%? Multiple Cholce An increase to cash for $520, an increase to sales tax expense for $20, and an increase to sales revenue for $500. An increase to cash for $500, an increase to sales tax payable for $20, and an increase to sales revenue for $480. An increase to cash for $520, an increase to sales tax poyable for $20, and an increase to sales revenue for $500. None of these answer choices is corroct On January 1, Year 1, the Mahoney Company borrowed $176,000 cash from Sun Bank by issuing a five-year 8% term note. The principal and interest are repaid by making annual payments beginning on December 31 , Year 1 . The annual payment on the loan based on the present value of annuity factor would be $44,080. The amount of principal repayment included in the December 31, Year 1 payment is: Muliple Choice $14,080 $37,651. $44,080 $30,000 Kier Company issued $600,000 in bonds on January 1, Year 1 . The bonds were is sued at foce value and carried a 5 -year term to maturity? They had a 6.00% stated rate of interest that was payable in cash on December 3is. Based on this information alone, the amount of interest expense shown on the December 31, Year 1 income statement and the cash flow from operating activities shown on the December 31, Year 1 statement of cash flows would be: Musiple Choice Croice A Choice 8 Choice C On January 1, Year 1, the Mahoney Company borrowed $324,090 cash from Sun Bank by issuing a fiveyear 816 term note. The principal and interest are repaid by making annual payments beginning on December 3t, Year 1 . The annual payment on the ioan based on the present value of annuity factor would be $81,150. The amount of principal repayment inciuded in the December 31 , Year 1 payment is: Muliple Choice 525,920 581,150 $74,658. $55,230. Under what condition is a pending lawsult recognized as a liability on a company's balance sheet? Multiple Choice The amount can be reasonably estimated. The outcome is probable The outcome is reasonably possible. The outcome is probable and can be reasonably estimated. Eureka Company issued $100,000 in bonds payable on January 1. Yeat 1. The bonds were Issued at face value and carried 5 -year torm to maturity. They had a 7% stated rate of interest that was payable in cash on January ist of each year beginning January 1 , Year 2 . Based on this information, the amount of total liabilities appearing on the December 31 , Year 1 balance sheet would be: Muitiple Choice $100,000 57,000 $99.300 $107000 The Clarion Company provides a one-year warranty on all merchandise it sells. In Year 1 , the company recorded sales of $500,000. it estimated that the warranty costs on these sales would amount to $2,000. In July, Year 2 , Clarion paid $250 to satisfy a warranty claim. Indicate whether each of the following statements is true or false. Indicate whether each of the following statements is true or false. Contingent liabilities are only recognized if they arise from past events. True or False If a company offers a warranty on the products it sells, the company records the warranty expense at the time that the warranty service is provided to customers under the terms of the warranty. True or False A line of credit is an agreement that allows a company to borrow a set amount of money for a period of two to five years. True or False A line of credit typically has an interest rate that is fixed (constant) for the length of the agreement. True or False