Professional Documents
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Liabilities Glare Company
Liabilities Glare Company
Glare Company
Total Current Liabilities – 3, 700, 000
Easy Company
Total Current Liabilities – 4, 100, 000
Manchester Company
Total Current Liabilities – 8, 100,000
Multiple Company
Total Current Liabilities – 2, 450, 000
Total Noncurrent Liabilities – 2, 000, 000
Cordillera Company
Current Liability – 3, 000, 000
Current Liability – 6, 000, 000
Noncurrent Liability – 4, 000, 000
Current Liability – 5, 000, 000
Intercon Company
Total Liabilities – 30, 000, 000
Cavalier Company
Total Current Liability – 15, 650, 000
Burma Company
Current Liability at the year-end – 6, 700, 000
Gar Company
Current Liabilities – 3, 900, 000
Able Company
Current Liabilities – 130, 000
Achilles Company
Notes Payable as Current – 5, 000, 000 NOT SURE
Eliot Company
Current Liabilities – 1, 500, 000
Largo Company
Current Liabilities – 750, 000
Dean Company
Current Liabilities – 800, 000
Willem Company
Current Liabilities – 2, 250, 000
Cobb Company
Unearned Revenue at the year-end – 850, 000
Regal Company
Unearned Revenue – 1, 250, 000
Greene Company
Unearned Service Contract Revenue – 480, 000
Ryan Company
Not sure 400, 000
Farr Company
Liability for deposits – 337, 000
Black Company
Current Liability for Advances – 880, 000
Kent Company
Escrow Accounts Liability – 605, 000
Bell Company
Escrow Liability – 450, 000
Nature Company
Income Before Bonus Before Tax – 262, 500
Income After Bonus Before Tax – 250, 000
Income After Bonus After Tax – 117, 536
Income After Tax Before Bonus – 186, 548
Ronald Company
Bonus for the Current Year – 150, 000
Christian Company
Income before bonus and Tax – 4, 280, 000
Gretchen Company
Bonus for the Current Year – 120, 000
Best Describe the term liability – PRESENT OBLIGATION ARISING FROM PAST
EVENT
Revenue associated with gift card sales should be recognized – WHEN PROBABLY GIFT
CARD REDEMPTION IS VIEWEDAS REMOTE
All else equal, a large increase in unearned revenue in the current period would be
expected to produce what effect on revenue in a future period? – LARGE INCREASE
BECAUSE UNEARNED REVENUE BECOMES REVENUE WHEN EARNED
When a product is delivered for which a customer advance has been previously received,
the appropriate journal entry includes – DEBIT TO LIABILITY AND CREDIT TO
REVENUE
When cash received from customers in the form of refundable deposit, the cash account is
increased with a corresponding increase in – CURRENT LIABILITY
A departments store received cash and issued a gift certificate that is redeemable in
merchandise. When is the gift certificate issued – DEFFERED REVENUE SHOULD BE
INCREASED
A retail store received cash and and issued a gift certificate that is redeemable in
merchandise. How would the deferred revenue account be affected by the redemption and
non-redemption of certificates, respectively? – DECREASE AND DECREASE
An entity received an advance payment for special order goods that are to be
manufactured and delivered without six months. How should the advance payment be
reported – CURRENT LIABILITY
At the year-end, an entity sold refundable merchandise coupons. The entity received a
certain amount for cash coupon redeemable next year for merchandise with a certificate
retail price. At the year end, hoe should the entity report those coupon transactions? –
UNEARBED REVENUE AT THE CASH RECEIVED
Proceeds from advance sale of non refundable tickets – UNEARNED REVEMUE FOR
THE ENTIRE PROCEEDS
Under loyalty agreement, received loyalties from the assignment of a patent for four years.
The royalties received in advance should be reported as revenue – IN THE PERIOS
EARNED
Retail of home appliances offers a service contract in aech appliance sold. Collections
received for service contract should be recorded as increase in –DEFERRED REVENUE
ACCOUNT
Sekls appliance that include in a 3 year warranty. Whne should the entity recognize these
warranty costs? – WHEN THE MACHINES ARE SOLD
PREMIUM LIABILITY
MILL COMPANY
Premium expense for 2020 – 384, 000
Premium claims outstanding on December 31, 2020 – 224, 000
Day Company
Premium expense for 2020 – 6, 000, 000
Liability for unredeemed coupons – 1, 500, 000
Topsy Company
Year-end Estimated Liability – 1, 500, 000
Cereal Company
Liability for coupons n December 31, 2020 – 350, 000
Curran Company
Premium expense for 2020 – 462, 000
Liability for unredeemed coupons – 242, 000
Milan Company
Estimated Liability for coupons – 396, 000
Blake Company
Liability for unredeemed coupons December 31, 2020 – 915, 000
Clam Company
Premium Expense for the current year – 2, 025, 000
Outstanding premiums at year end – 375, 000
Baker Compay
Estimate Liability at year-end – 750, 000
Charlene Company
Premium expense on 2020 – 2, 700, 000
Premium liability on December 31, 2020 - 900, 000
Premium expense for 2021 – 3, 375, 000
Premium liability on December 31, 2021 – 1, 125, 000
Love Company
Premium expense on 2020 – 1, 000, 000
Premium liability on December 31, 2020 - 200, 000
Premium expense for 2021 – 1, 920, 000
Premium liability on December 31, 2021 – 120, 000
Deluxe Company
Estimated Rebate Liability – 1, 050, 000
Jolly Company
Rebate expense for the current year – 170, 000
James Company
Allocated to the points – 1, 020, 000
Loyalty points for 2020 – 489, 600
Revenue earned for loyalty points – 224, 400
William Company
Revenue points for 2020- 600, 000
Reveue from points for 2021 – 200, 000
Cost of customer premium offer should be charge to expense – WHEN THE RELATED
PRODUCT IS SOLD
Accounting concept that requires recognition of liability for customer premium offer is –
MATCHING PRINCIPLE
Accounitng for cost incentive program for frequent customer purchases involves -
RECORDING AN EXPENSE AND A LIABILITY EACH PERIOD
WARRANTY LIABILITY
Hanna Company
Warranty expenditures during the year – 1, 700, 000
Pink Company
Warranty expenditures incurred for the current byear – 2, 040, 000
Carpet Company
Warranty Liability Account on Dec. 31, 2020 – 700, 000
Mile Company
Warranty Expense – 720, 000
Warranty Liabilty at year end – 550, 000
Bold Company
Warranty expense for the current year – 80, 000
Warranty Liabiltiy at year-end- 90, 000
Ash Company
Warranty expense fir 2020 – 2, 400, 000
Estimated Warranty Liabiltiy – 1, 700, 000
Villa Company
Net Sales CR – 8M
Dubious Company
Warranty expense for 2020 – 350k
Warranty Liability on dec, 31 2020- 250k
Warranty expense 2021 – 490k
Warranty liability on dec 31, 2021 – 440k\
Best describe accrual approach of accounting for warranty cost – EXPENSE BASE
ON ESTIMATE IN YEAR OF SALE
Best describes as incurred approach – EXPENSED WHEN INCURRED
Characteristic osf the accrual warranty but not sale of warramty – WARRANTY
LIAB
Chato Company
Warranty Provision – 300k
Odyssey Company
Undiscounted cash flow – 89, 880
Provision for law suit – 85, 386
Libya Company
Undiscounted Cash flow – 1, 382, 400
Provision on dec 31, 2020 – 1, 230, 336
NOTE PAYABLE
Joshua Company - 2, 160, 000
Mann Company – 180, 000
PARES COMPANY – NCOME STATEMENT – 306, 000
Roth Company – NP – 1M
Pine Company – Accrued interst payable –
Alpha Company – Accrued interest payable – 100k
When enetity issued a note solely - FACE AMOUNT DISCOUNTED
If presemt value of note issued in exchange for property less than face amount –
AMORTIZED AS INTEREST EXPENSE OVER THE LIFE OF THE NOTE
Borrowed cash from bank – MORE THSN THE STATED DISCOUNT RATE OF 10%
Note payable with no ready market in exchanged for peoprty – THE PV OF NP MUST BE
APPROXIMATED BECAUSE USING AN IMPUTED INTEREST RTE
Statement is correct when entity issued NP with no stated interest rate – ASSET SHPULD
BE DEPRECIATED OVER THE TERM OF THE NOTE PAYABLE