113.
Halbur Company reported total assets of $150,000, current assets of $60,000, total
stockholders’ equity of $60,000, and noncurrent liabilities of $65,000.
Required:
(show computations):
1. Determine the current liabilities.
2. Compute working capital.
114.
Moore Company has the following partial list of account balances at year-end December 31,
2016:
Accounts payable
$1,800
Accounts receivable
4,600
Cost of goods sold
15,000
Cash
23,000
Taxes payable
10,000
Land
25,000
Notes payable (due in 6 months)
1,000
Salaries payable
900
Inventory
4,300
Additional information: The accounts payable balance at the end of the prior year was $3,000.
Required:
(All answers are for December 31, 2016.)
115.
Sharp Company borrowed $500,000 on a 6% one-year, interest-bearing note dated November
1, 2016 with interest payable at maturity. The annual accounting period ends on December 31.
Assume that adjusting entries are only made at December 31, the company’s fiscal year-end.
Required:
Prepare journal entries for each of the following dates:
A. November 1, 2016.
B. December 31, 2016.
C. October 31, 2017.
116.
On April 1, 2016, Wolf Company borrowed $5,000 on an 8% note payable. The maturity date of
the note (and payment of all interest) is July 1, 2017. The accounting period ends December
31. Assume no adjusting entries are made during the year.
Required:
Prepare the journal entry for each of the following dates:
A. April 1, 2016.
B. December 31, 2016.
C. July 1, 2017.
117.
The following data were provided by the detailed payroll records of Mountain Corporation for
the last week of March 2017, which will not be paid until April 5, 2017:
Compensation (wages)
$36,000
Income taxes withheld
7,550
A. Journal entry to record payroll and employee deductions.
Compensation expense
Compensation expense ($36,000 × 7.65%)
FICA taxes payable
FICA taxes at a 7.65% rate (no employee had reached the maximum).
Required:
A. Prepare the March 31, 2017 journal entry to record the payroll and the related employee
deductions.
B. Prepare the March 31, 2017 journal entry to record the employer’s FICA payroll tax
expense.
C. Calculate the total payroll-related liabilities at March 31, 2017 using the results of
requirements (A) and (B).
9-88
118.
The following is a partial list of account balances for Coen, Inc. as of December 31, 2016
Accounts payable
$5,000
Accounts receivable
6,000
Bonds payable (all due in 10 years)
40,000
Note payable (10% of the note is due
within one year; balance due in 3 years)
10,000
Note payable (due in six months)
2,000
Salaries payable
800
Sales revenue
49,000
Income taxes payable
8,000
Unearned revenue
800
Required:
Prepare the liabilities section of Coen Inc.’s classified balance sheet for December 31, 2016.
Current Liabilities:
Note payable (current portion)
Salaries payable
Income taxes payable
Unearned revenue
Total Current Liabilities
Long-term Liabilities:
Bonds payable
9-89
9-90
119.
The following data is available for Tommy’s Toys for the years 2014 through 2017:
2017
2016
2015
2014
Cost of goods
sold
$7,506
$7,646
$7,799
$7,815
Accounts
payable
$1,240
$1,022
$878
$896
Required:
A. Calculate the accounts payable turnover ratio for the following years:
1.
2017
2.
2016
3.
2015
B. Calculate the number of days it is taking Tommy’s Toys to pay its vendors (assume a 365–
day year):
1.
2017
2.
2016
3.
2015
C. Explain whether Tommy’s Toys is doing a better job over the years of paying its vendors in
a timely manner.
120.
Answer the following four questions.
A. What is a contingent liability?
B. When must a contingent liability be recorded through a journal entry?
C. When should a contingent liability be disclosed in the footnotes to the financial
statements?
D. When is disclosure of a contingent liability not required?