Short-term Liabilities Snapshot questions
College of Business Administration Accounting Department Question#1: Answer the following questions: 1. If cash is borrowed on a $50,000, 6-month, 12% note on September 1, how much interest expense would be incurred by December 31? 2. The cash register total including sales taxes is $23,320, and the sales tax rate is 6%. What is the sales taxes payable? 3. If $15,000 is collected in advance on November 1 for 3 months’ rent, what amount of rent revenue should be recognized by December 31? Question#2: Giant Corporation issues $200,000 of bonds for $189,000. Show how the bonds would be reported on the balance sheet at the date of issuance. Question #3: Presented here are liability items for Orange Inc. at December 31, 2024. Prepare the liabilities section of O’Orange’s balance sheet. Accounts payable $157,000 FICA taxes payable $ 7,800 Notes payable 20,000 Interest payable 40,000 (due May 1, 2025) Notes payable (due 2026) 80,000 Bonds payable (due 2029) 900,000 Income taxes payable 3,500 Unearned rent revenue 240,000 Sales taxes payable 1,700 Discount on bonds payable 41,000 Question#4: Rolman Corporation is authorized to issue 1,000,000 shares of $5 par value common stock. In its first year, the company has the following stock transactions. – Jan. 10 Issued 400,000 shares of stock at $8 per share. – Sept. 21 Purchased 10,000 shares of common stock for the treasury at $9 per share. – Dec. 24 Declared a cash dividend of 10 cents per share on common stock outstanding. Prepare the stockholders’ equity section of the balance sheet, assuming the company had retained earnings of $150,600 on December 31 and an accumulated other comprehensive loss of $105,000. Question#5: Vertical analysis (common-size) percentages for Austin Company’s sales, cost of goods sold, and expenses are listed here. Vertical Analysis 2023 2022 2021 Sales revenue 100.0% 100.0% 100.0% Cost of goods sold 61.2 62.4 63.5 Operating expenses 26.5 27.4 28.5 Did Austin Company’s net income as a percent of sales increase, decrease, or remain unchanged over the 3-year period? Provide numerical support for your answer? Question#6: Summary financial information for Rose Company is as follows. December 31, 2017 December 31, 2016 Current assets Plant assets (net) Total assets $234,000 756,000 $990,000 $180,000 420,000 $600,000 Compute the amount and percentage changes in 2017 using horizontal analysis, assuming 2016 is the base year
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