Current Liabilities

×
Brainscape
BrainscapeBrainscapeFREE - In Google Play
VIEWFind Flashcards
e.g. MCAT, pharma, bar exam, Sp SearchGo
Close
Knowledge GenomeTM
Brainscape Certified
Browse over 1 million classes created by top students, professors, publishers, and experts,
spanning the world's body of "learnable" knowledge.
Entrance Exams
AP Exams
GCSE Exams
Graduate Entrance Exams
University Entrance Exams
Professional Certifications
Bar Exam
Driver's Ed
Financial Exams
Medical & Nursing Certifications
Military Exams
Technology Certifications
TOEFL
Other Certifications
Foreign Languages
Arabic
Chinese
French
German
Hebrew
Italian
Japanese
Korean
Linguistics
Portuguese
Russian
Spanish
TOEFL
Other Foreign Languages
Science
Anatomy
Astronomy
Biochemistry
Biology
Cellular Biology
Chemistry
Earth Science
Environmental Science
Genetics
Geology
Health
Life Science
Marine Biology
Meteorology
Microbiology
Oceanography
Organic Chemistry
Periodic Table
Physical Science
Physics
Physiology
Plant Science
Science
Zoology
English
American Literature
British Literature
Creative Writing
English
Fiction
Medieval literature
Phonics
Poetry
Proverbs and Idioms
Shakespeare
Spelling
Vocab Builder
Humanities & Social Studies
Anthropology
Citizenship
Civics
Classics
Communications
Criminal Justice
Geography
History
Philosophy
Political Science
Psychology
Religion and Bible
Social Studies
Social Work
Sociology
Mathematics
Algebra
Algebra II
Arithmetic
Calculus
Geometry
Linear Algebra
Math
Multiplication Tables
Precalculus
Probability
Statistical Methods
Statistics
Trigonometry
Medical & Nursing
Anatomy
Anesthesiology
Audiology
Bacteriology
Biochemistry
Bioethics
Biomedical Science
Cardiology
Cardiovascular
Childbirth
Chiropractic
Dentistry
Dermatology
Diagnostic Imaging
Drugs
Endocrinology
Epidemiology
ER
Gastroenterology
Genetics
Geriatrics
Gross Anatomy
Gynecology
Hematology
Hormones
Infectious Disease
Medical Exams
Medical Terminology
Microanatomy
Musculoskeletal
Neuroanatomy
Neurology
Neuromuscular
Neurosurgery
Nursing
Nutrition
Obstetrics
Occupational Therapy
Oncology
Opthamology
Optometry
Orthodontics
Orthopedics
Otolaryngology
Paramedic
Passive Care
Pathology
Pathoma
Pediatrics
Periodontics
Pharmacology
Pharmacy
Phlebotomy
Physical Therapy
Physiology
Podiatry
Prenatal
Pulmonary
Radiography
Radiology
Renal
Respiratory
Rheumatology
Skeletal
Spinal Anatomy
Surgery
Toxicology
Urology
Veterinary
Vocations
Air Traffic Control

ASVAB
Barbering
Boating
Cosmetology
Electrician
Firefighting
Horticulture
HVAC
Interior Design
Massage Therapy
Military
Pilot License
Plumbing
Policing
Welding
Law
Bankruptcy
Bar Exam
Business Law
Civil Procedure
Constitutional Law
Contract Law
Corporate Law
Criminal Law
Evidence
Family Law
Intellectual Property
International Law
Law
Litigation
Property Law
Torts
Trusts & Estates
Business
Accounting
Advertising
Business
Business Communication
Employee Training Demo
Entrepreneurship
Fashion
Finance
Human Resources
Insurance
International Business
Logistics
Management
Marketing
Project Management
Real Estate
Risk Management
Salesforce
Supply Chain
Tourism
Finance & Economics
Accounting
Economics
Finance
Technology & Engineering
Architecture
Biotechnology
Computer Programming
Computer Science
Engineering
Graphic Design
Information Technology
Management Information Systems
Food & Beverage
Bartending
Cooking
Culinary Arts
Nutrition
Fine Arts
Art
Art History
Dance
Music
Other Fine Arts
Random Knowledge
Astrology
Blackjack
Knowledge Rehab
Mythology
National Capitals
People You Should Know
Sports Trivia
Tarot Cards
Make Flashcards
Brainscape
How would you like to start?

Find a subject
Create my own
Just Get Smarter!

Log in with Google
Log in with Facebook
Sign Up with Email
Brainscape
Sign Up via Email
First Name Last Name

Email Address
Password
Confirm Password
I have read the Terms & Agreements
Next
1
2
3
Which best describes you?
Teacher
Student
Other Professional
Next
Skip this Step

1
2
3
What is your current school?
School Name (e.g. University of G
Elementary (grades 1-5)
Middle (grades 6-8)
High (grades 9-12)

Undergraduate
Graduate
Medical
Nursing
Other Health Professional
Law
Other
Finish
Skip this Step

1
2
3
Educators
Companies
About
more...
Login
Brainscape
Login
you@email.com
password
Login
Log in with Google

Forgot your password?
Register
Brainscape
Find a subject
Create my own
Just Get Smarter!
Log in with Google
Sign Up with Email
Brainscape
Sign Up via Email

Email Address
Password
Confirm Password
Next
1
2
3
Teacher
Student
Other Professional
Next
Skip this Step

1
2
3
Middle (grades 6-8)
High (grades 9-12)
Undergraduate
Graduate
Medical
Nursing
Law
Other
Finish
Skip this Step

1
2
3
more... more...
e.g. MCAT, pharma, bar exam, Sp Dismiss Search Bar SearchGo
Current Liabilities Flashcards Preview

Study > Current Liabilities > Flashcards
Study These Flashcards
Brainscape
How would you like to get started?
Register
Login. I have an account.
Brainscape
Register
Flashcards in Current Liabilities Deck (21):
1
Bake Co.'s trial balance included the following at December

31, Year 1:
Accounts payable $80,000
Bonds payable, due Year 2 300,000
Discount on bonds payable 15,000
Deferred income tax liability 25,000
The deferred income tax liability is not related to an asset

for financial accounting purposes and is expected to
reverse in Year 2. What amount should be included in the
current liability section of Bake's December 31, Year 1
balance sheet?
a) $365,000
b) $390,000
c) $395,000
d) $420,000
a) $365,000
$365,000. Correct. All deferred tax assets and liabilities are reported as
noncurrent. The computation is: 80,000 + 300,000 − 15,000 = $365,000.
Black Corp.'s accounts payable at December 31, 20X4,

totaled $900,000 before any necessary year-end
adjustments relating to the following transactions:
On December 27, 20X4, Black wrote and recorded checks to

creditors totaling $400,000, causing an overdraft of $100,000
in Black's bank account at December 31, 20X4. The checks
were mailed out on January 10, 20X5.
On December 28, 20X4, Black purchased and received goods
for $153,061, terms 2/10, n/30. Black records purchases and
accounts payable at net amounts. The invoice was recorded
and paid on January 3, 20X5.
Goods shipped F.O.B. destination on December 20, 20X4
from a vendor to Black were received January 2, 20X5. The
invoice cost was $65,000.
At December 31, 20X4, what amount should Black report as
total accounts payable?
a) $1,515,000
b) $1,450,000
c) $1,153,061
d) $1,053,061
b) $1,450,000
Preadjusted balance in accounts payable $900,000
Plus checks not sent to creditors until Jan. 10 (this amount was debited to
accounts payable and must be reversed because the checks have not been
sent - accounts payable has not been reduced as of December 31)
400,000
Plus goods received Dec. 28, at net: .98($153,061)(the firm records purchases
at net of 2% discount) 150,000
Equals ending accounts payable $1,450,000
There is no liability at December 31, 20X4 for the goods shipped FOB
destination because title does not pass until the goods reach the destination,
which did not occur until January.
The firm must include the Dec. 28 receipt of goods in accounts payable
because the firm has received the goods.
In its Year 5 financial statements, Cris Co. reported an

interest expense of $85,000 in its income statement and a
cash amount of $68,000 paid for interest in its cash flow
statement. There was no prepaid interest or interest
capitalization at either the beginning or end of Year 5. The
accrued interest at December 31, Year 4 was $15,000.
What amount should Cris Co. report as accrued interest
payable in its December 31, Year 5 balance sheet?
a) $2,000
b) $15,000
c) $17,000
d) $32,000
d) $32,000
An analysis of the accrued interest payable account leads to the correct

ending balance:
Beginning balance + Interest expense - Interest payments = Ending balance

$15,000 + $85,000 - $68,000 = $32,000
Gar, Inc.'s trial balance reflected the following liability

account balances at December 31, 20X5:

Bonds payable, due 20X6 34,000
Deferred income tax payable 4,000
Discount on bonds payable 2,000
Dividends payable on 2/15/X6 5,000
Income tax payable 9,000
Notes payable, due 1/19/X7 6,000
The deferred income tax payable is based on temporary

differences that will reverse in 20X7 and 20X8.
In Gar's December 31, 20X5 balance sheet, the current

liabilities total was
a) $71,000
b) $69,000
c) $67,000
d) $65,000
d) $65,000

Bonds payable, due 20X6 34,000
Discount on bonds payable (2,000)
Dividends payable on 2/15/X6 5,000
Income tax payable 9,000
Current liabilities at 12/31/X5 $65,000
Deferred taxes are classified as non-current.
Kew Co.'s accounts payable balance at December 31, 20X2

was $2,200,000 before considering the following data:
Goods shipped to Kew F.O.B. shipping point on December

22, 20X2 were lost in transit. The invoice cost of $40,000 was
not recorded by Kew. On January 7, 20X3, Kew filed a
$40,000 claim against the common carrier.
On December 27, 20X2, a vendor authorized Kew to return,
for full credit, goods shipped and billed at $70,000 on
December 3, 20X2. The returned goods were shipped by
Kew on December 28, 20X2. A $70,000 credit memo was
received and recorded by Kew on January 5, 20X3.
Goods shipped to Kew F.O.B. destination on December 20,
20X2 were received on January 6, 20X3. The invoice cost
was $50,000.
What amount should Kew report as accounts payable in its
December 31, 20X2 balance sheet?
a) $2,170,000
b) $2,180,000
c) $2,230,000
d) $2,280,000
a) $2,170,000
Preadjusted balance $2,200,000
Plus cost of goods in transit. The goods became the property of Kew at the
shipping point (FOB shipping point). Kew owes the vendor for the goods.
40,000
Less credit for returned goods shipped back to vendor before year-end
(70,000)
Total accounts payable $2,170,000
The goods in transit FOB destination are not yet the property of Kew
because the title does not pass until the goods reach the destination.
Kemp Co. must determine the December 31, 20X2, year-end

accruals for advertising and rent expenses. A bill for $500
in advertising expenses was received January 7, 20X3,
comprising costs of $375 for advertisements in December
20X2 issues, and $125 for advertisements in January 20X3
issues of the newspaper.
A store lease, effective December 16, 20X1, calls for fixed

rent of $1,200 per month, payable one month from the
effective date and monthly thereafter. In addition, rent
equal to 5% of net sales over $300,000 per calendar year is
payable on January 31 of the following year. Net sales for
20X2 were $550,000.
In its December 31, 20X2 balance sheet, Kemp should

report accrued liabilities of
a) $12,875
b) $13,000
c) $13,100
d) $13,475
d) $13,475
Portion of the $500 advertising bill relating to December 20X2 $375
Lease rental ($1,200 × 1/2 of December) $600
Additional rental based on sales (.05)($550,000 − $300,000) $12,500
Total current liabilities $13,475
Hemple Co. maintains escrow accounts for various

mortgage companies. Hemple collects the receipts and pays
the bills on behalf of the customers. Hemple holds the
escrow monies in interest-bearing accounts. They charge a
10% maintenance fee to the customers based on interest
earned. Hemple reported the following account data:
Escrow liability beginning of year $500,000

Escrow receipts during the year 1,200,000
Real estate taxes paid during the year 1,450,000
Interest earned during the year 40,000
What amount represents the escrow liability balance on
Hemple's books?
a) $290,000
b) $286,000
c) $214,000
d) $210,000
b) $286,000
This question requires you to think about how liabilities are accrued. If
Hemple is holding funds for a mortgage company, it is a liability for Hemple.
The liability would be increased when escrow monies are deposited and
decreased when there is payment made on behalf of customers. The funds
are also earning interest and 10% of that interest is charged as a
maintenance fee to the customer. A T-Account will help demonstrate this:
The slide shows a table for “Escrow liability,” where taxes paid from Escrow
is 1,450,000, maintenance fees as none, beginning balance of Escrow receipts
is 1,200,000, interest earned is 40,000 and ending balance is 210,000.
Rabb Co. records its purchases at gross amounts but wishes

to change to recording purchases net of purchase
discounts. Discounts available on purchases recorded from
October 1, Year 3 to September 30, Year 4, totaled $2,000. Of
this amount, $200 is still available in the accounts payable
balance.
The balances in Rabb's accounts as of and for the year

ended September 30, Year 4, before conversion are:
Purchases $100,000
Purchase discounts taken 800
Accounts payable 30,000
What is Rabb's accounts payable balance as of September
30, 20X4 after the conversion?
a) $29,800
b) $29,200
c) $28,800
d) $28,200
a) $29,800
Only the discounts still available on accounts yet to be paid can be deducted
from the accounts payable balance, which now stands at gross.
The firm owes $30,000 at gross, which means that if none of the cash
discounts available are taken, the firm will pay $30,000. The net counterpart
of that amount is $29,800 ($30,000 − $200). If the firm pays all its remaining
accounts within the cash discount period, it would pay only $29,800.
That is the assumption underlying the net method.

9
Acme Co.'s accounts payable balance at December 31 was

$850,000 before necessary year-end adjustments, if any,
related to the following information:
At December 31, Acme has a $50,000 debit balance in its

accounts payable resulting from a payment to a supplier
for goods to be manufactured to Acme's specifications.
Goods shipped F.O.B. destination on December 20 were

received and recorded by Acme on January 2. The invoice
cost was $45,000.
In its December 31 balance sheet, what amount should

Acme report as accounts payable?
a) $850,000
b) $895,000
c) $900,000
d) $945,000
c) $900,000
The $50,000 advance is not related to accounts payable, even though it was
made to a supplier for which Acme would have accounts payable. It is a
prepayment. Removing the $50,000 debit increases the accounts payable
balance by that amount. The $45,000 shipment is not part of the inventory of
Acme as of December 31 nor is it a liability (accounts payable) because title
to the goods did not transfer to Acme until January 2. FOB destination
means that title does not transfer until goods reach their destination. Acme
treated this item correctly because it was recorded January 2. Therefore, the
correct accounts payable balance is $900,000 ($850,000 before adjustment +
$50,000).
10
As of December 1, year 2 a company obtained a $1,000,000

line of credit maturing in one year on which it has drawn
$250,000, a $750,000 secured note due in five annual
installments, and a $300,000 three-year balloon note. The
company has no other liabilities. How should the
company's debt be presented in its classified balance sheet
on December 31, year 2 if no debt repayments were made
in December?
a) Current liabilities of $1,000,000; long-term liabilities of

$1,050,000.
b) Current liabilities of $500,000; long-term liabilities of
$1,550,000.
c) Current liabilities of $400,000; long-term liabilities of
$900,000.
d) Current liabilities of $500,000; long-term liabilities of
$800,000.
c) Current liabilities of $400,000; long-term liabilities of $900,000.
This question has three debt instruments that need to be categorized into
current or long-term. The line of credit is due in one year so it is all current.
The secured note is due in 5 annual installments so 1/5 is current and 4/5 is
long-term. The balloon note is due in 3 years so it is all long term.
Instrument Current Long-term

Instrument Current Long-term
Line of credit 250,000 0
Secured 150,000 600,000
Balloon 0 300,000
Total 400,000 900,000
11
Which of the following is generally associated with

payables classified as accounts payable?
Periodic payment of interest Secured by collateral
a) No No
b) No Yes
c) Yes No
d) Yes Yes
a) No No
Accounts payable is also labeled: accounts payable, trade. The accounts

payable account is used only for routine trade payables, typically for
purchases of inventory and supplies.
Interest accrued is recorded in accrued interest payable, and secured debt

is recorded in other specifically-labeled liability accounts.
12
The balance in Kemp Corp.'s accounts payable account at

December 31, 20X5 was $900,000 before any necessary year-
end adjustment relating to the following:
Goods were in transit to Kemp from a vendor on December

31, 20X5. The invoice cost was $50,000. The goods were
shipped F.O.B. shipping point on December 29, 20X5 and
were received on January 4, 20X6.
Goods shipped F.O.B. destination on December 21, 20X5

from a vendor to Kemp were received on January 6, 20X6.
The invoice cost was $25,000.
On December 27, 20X5, Kemp wrote and recorded checks to

creditors totaling $40,000 that were mailed on January 10,
20X6.
In Kemp's December 31, 20X5 balance sheet, the accounts

payable should be
a) $940,000
b) $950,000
c) $975,000
d) $990,000
d) $990,000
The correct answer, $990,000, is the balance in the AP account at year-end,
which equals: $900,000 (bal. before adjustment) + $50,000 (in transit, FOB
shipping point) + $40,000 (checks not sent as of Dec. 31).
The $50,000 amount is included in AP at 12/31 because the title passed to

Kemp at 12/29. The title to goods shipped FOB shipping point passes to the
buyer when the goods reach the common carrier. Therefore, Kemp owned
the goods and incurred a liability on 12/29.
The $25,000 amount is not included in AP at 12/31 because the title did not
pass to Kemp until the goods reached the destination, which occurred after
12/31. The title of the goods shipped FOB destination passes to the buyer at
the destination.
The $40,000 amount is included in AP at 12/31 because the checks were not
sent as of 12/31. Kemp did not extinguish this amount of its debt as of 12/31
and should make an adjusting entry to increase both cash and AP at 12/31.
13
On December 31, special insurance costs, incurred but

unpaid, were not recorded.
If these insurance costs were related to work-in-process,

what is the effect of the omission on accrued liabilities and
retained earnings in the December 31 balance sheet?
Accrued liabilities Retained earnings

a) No effect No effect
b) No effect Overstated
c) Understated No effect
c) Understated Overstated
c) Understated No effect
Accrued liabilities are understated because the insurance costs were

incurred but not paid. The firm has an obligation for coverage received. The
omitted journal entry is:
DR: Work in process

CR: Accrued payables
Retained earnings is unaffected because no expense has been incurred. The

omission of the above entry has no effect on expenses or retained earnings.
Work in process is an asset. When work in process is completed and sold,

this part of the total cost of work in process will be expensed.
14
Mill Co.'s trial balance included the following account

balances at December 31, Year 3:

Bonds payable, due Year 4 25,000
Discount on bonds payable, due Year 4 3,000
Dividends payable 1/31/Y4 8,000
Notes payable, due Year 5 20,000
What amount should be included in the current liability
section of Mill's December 31, Year 3 balance sheet?
a) $45,000
b) $51,000
c) $65,000
d) $78,000
a) $45,000
Each item in the list, except the notes payable, due more than one year from
the Year 3 balance sheet should be included in current liabilities. Except the
notes payable, each item is due within one year of the 20X3 balance sheet.
The discount reduces the net bond liability.
Thus, current liabilities total $45,000 = $15,000 + ($25,000 − $3,000) + $8,000.
15
During the current year, Casual Wear Co. had total retail
sales of $800,000 and collected a 5% state sales tax on all
sales. At the end of the prior year, Casual Wear had $4,500
in sales taxes that had not been remitted to state
authorities. During the current year, Casual Wear remitted
$39,500 in state sales tax. What amount should be recorded
in Casual Wear's current-year financial statements?
a) $5,000 in sales tax payable

b) $39,500 in sales tax expense
c) $40,000 in sales tax revenue
d) $840,000 in sales revenue
a) $5,000 in sales tax payable
The ending liability balance is calculated as follows:

Beginning balance $4,500
Collections of sales tax ($800,000 × .05) 40,000
Less sales tax remitted (39,500)
Ending balance $5,000
16
As of December 15, Year 1, Aviator had dividends in arrears

of $200,000 on its cumulative preferred stock. Dividends for
Year 1 of $100,000 have not yet been declared. The Board of
Directors plans to declare cash dividends on its preferred
and common stock on January 16, Year 2. Aviator paid an
annual bonus to its CEO based on the company's annual
profits. The bonus for Year 1 was $50,000, which will be
paid on February 10, Year 2. What amount should Aviator
report as current liabilities on its balance sheet at
December 31, Year 1?
a) $ 50,000
b) $150,000
c) $200,000
d) $350,000
a) $ 50,000
Only the bonus is a liability of the firm as of 12/31/Year 1. That amount was
earned and granted in Year 1 and thus is recognized in the Year 1 balance
sheet because it is not due for payment until Year 2. Dividends are not
liabilities until declared. There is no unpaid declared dividend at 12/31/Year
1.
17
Bloy Corp.'s payroll for the pay period ended October 31,
2005 is summarized as follows:
DP = Department Payroll
TWG = Total Wages
TWH = Tax Withheld
Federal income Amount of wages to payroll taxes

DP TWG TWH F.I.C.A. Unemployment
Factory 22,000 3,000 16,000 2,000
Sales 18,000 2,000 8,000 -
Office 60,000 7,000 56,000 18,000
Total 100,000 12,000 80,000 20,000
========= ========= ======== =========
Assume the following payroll tax rates:
F.I.C.A. for employer and employee 7% each
Unemployment 3%
What amount should Bloy accrue as its share of payroll

taxes in its October 31, 2005 balance sheet?
a) $18,200
b) $12,600
c) $11,800
d) $6,200
Brainscape
Register
c) $11,800
This question asks for the ending payroll tax liability. This amount is the
employer's share of FICA at 7% and the unemployment tax at 3%. Both have
maximum wage limits. The $6,200 ending payroll tax liability is computed as
$80,000(.07) + $20,000(.03).
18
Kent, Co. filed a voluntary bankruptcy petition on August

15, 20X5 and the statement of affairs reflects the following
accounts:
APWFSC = Assets pledged with fully secured creditors

APWPSC = Assets pledged with partially secured creditors
Book Value Current Value

Assets:
APWFSC $ 300,000 $370,000
APWPSC 180,000 120,000
Free assets 420,000 320,000
$ 900,000 $810,000
Liabilities:
Liabilities with priority $ 70,000
Fully secured creditors 260,000
Partially secured creditors 200,000
Unsecured creditors 540,000
$1,070,000
Assume that the assets are converted to cash at the

estimated current values and the business is liquidated.
What amount of cash will be available to pay unsecured
non-priority claims?
a) $240,000
b) $280,000
c) $320,000
d) $360,000
Brainscape
Register
d) $360,000
Unsecured non-priority creditors are the last to receive assets. The book
value information is not relevant to the question.
Free assets $320,000

Assets pledged with fully secured creditors $370,000
Less payments to fully secured creditors (260,000)
Equals pledged assets available for unsecured claims
110,000
Total cash available for unsecured claims 430,000
Less priority claims (70,000)
Equals amount available to pay unsecured non-priority claims
$360,000
The partially secured creditors receive payment from the assets pledged for
partially secured creditors. Any remaining claims fall under the category of
unsecured non-priority
19
Dana Co.'s officers' compensation expense account had a

balance of $224,000 at December 31, 20X4 before any
appropriate year-end adjustment relating to the following:
No salary accrual was made for December 30-31, 20X4.

Salaries for the two-day period totaled $3,500.
20X4 officers' bonuses of $62,500 were paid on January 31,

20X5.
In its 20X4 income statement, what amount should Dana

report as officers' compensation expense?
a) $290,000
b) $286,500
c) $227,500
d) $224,000
Brainscape
Register
a) $290,000
Both adjustments are included in compensation expense because they are

costs of services rendered by employees in 20X4. The firm has incurred a
liability and therefore an expense as of 12/31/X4 for each of these items.
$290,000 = $224,000 + $3,500 + $62,500.
20
Hudson Hotel collects 15% in city sales taxes on room

rentals, in addition to a $2 per room, per night, occupancy
tax.
Sales taxes for each month are due at the end of the
following month, and occupancy taxes are due 15 days
after the end of each calendar quarter. On January 3, 20X5
Hudson paid its November 20X4 sales taxes and its fourth
quarter 20X4 occupancy taxes. Additional information
pertaining to Hudson's operations is:
20X4 Room Rentals Room Nights

October $100,000 1,100
November 110,000 1,200
December 150,000 1,800
What amounts should Hudson report as sales taxes payable
and occupancy taxes payable in its December 31, 20X4
balance sheet?
Sales taxes Occupancy taxes

a) $39,000 $6,000
b) $39,000 $8,200
c) $54,000 $6,000
d) $54,000 $8,200
Brainscape
Register
b) $39,000 $8,200
Sales taxes payable at the end of 20X4 are .15($110,000 + $150,000) = $39,000
because November and December sales taxes were not yet paid as of
12/31/X4.
Occupancy taxes payable are $2(1,100 + 1,200 + 1,800) = $8,200 because the
fourth quarter taxes were not paid as of 12/31/X4.
21
Under state law, Acme may pay 3% of eligible gross wages

or it may reimburse the state directly for actual
unemployment claims.
Acme believes that actual unemployment claims will be 2%

of eligible gross wages and has chosen to reimburse the
state. Eligible gross wages are defined as the first $10,000 of
gross wages paid to each employee. Acme had five
employees each of whom earned $20,000 during 20X4.
In its December 31, 20X4 balance sheet, what amount

should Acme report as accrued liability for unemployment
claims?
a) $1,000
b) $1,500
c) $2,000
d) $3,000
Brainscape
Register
a) $1,000
The wage limit on unemployment tax is $10,000. Thus, the total accrued
liability, which is also the unemployment tax amount, is 5($10,000)(.02) =
$1,000.
Brainscape
Now make it stick!
Study these Flashcards on any device

Find millions of other flashcards created by students, teachers, & publishers
Create your own!

Brainscape
Register
– or –
Browse the catalog

Create Flashcards
Brainscape
Find a subject
Create my own
Just Get Smarter!

Log in with Google
Sign Up with Email
Brainscape
Sign Up via Email

Email Address
Password
Confirm Password
Next
1
2
3
Teacher
Student
Other Professional
Next
Skip this Step

1
2
3

Middle (grades 6-8)
High (grades 9-12)
Undergraduate
Graduate
Medical
Nursing
Law
Other
Finish
Skip this Step

1
2
3
e.g. MCAT, pharma, bar exam, Sp SearchGo
Decks in Study Class (125):
Accrual
Fasb Ifrs
Assumptions Recognition
Fair Value
Post Assessment I1
Financial Statements
Diagnostic I2
Indirect Direct Method
Ratios
Post Assessment I2
Diagnostic I3
Consolidation
Post Assessment 13
Diagnostic 14
Sec
Eps
Interim Financial Reporting
Diagnostic Assessment Ii1
Cash
Allowance Bad Debt
Notes Sales Receivables
Factor Receivables
Inventory Results
Post Assessment Ii1
Presentations Valuation Capitalization
Depreciation
Commercial Substance Impairment Ppe
Post Assessment Ii2
Equity And Debt Investments
Debt Equity Investments
Investor Stock Dividends Splits And Right
Intangibles Goodwill R Amp D Software
Post Assessment Ii3
Current Liabilities
Costs And Expenses Compensated Absences
Contingent Liability Principles
Notes Payable
Bond Accounting Principles
Bond Complications
Refinancing Short Term Obligations
Debt Retirement
Troubled Debt
Debt Covenant Compliance
Distinguishing Liabilities From Equity
Owners Equity Basics
Stock Issuance Preferred Stock Treasury S
Dividends
Stock Rights Retained Earnings
Book Value Per Share
Post Assessment Ii4
Diagnostic Assessment Iii1
Five Steps Of Revenue Recognition
Determining Transaction Price
Allocating Transaction Price
Special Issues In Revenue Recognition
Contract Modifications And Other Consider
Accounting For Construction Contracts
Pension Principles Reporting
Pension Expense Basics
Pension Expense Delayed Recognition
Pension Plan Reporting International
Postretirement Benefits
Stock Options Stock Appreciation
Post Assessment Iii1
Income Tax Basics
Permanent Temporary Differences
Tax Accrual Entry Tax Allocation Valuatio
Uncertain Tax Positions Net Operating Los
Types Of Changes And Accounting Approache
Accounting Errors Restatement Retrospecti
Introduction To Business Combinations
Introduction To Acquisition Method Of Acc
Determining The Cost Of The Business Acqu
Recognizing Measuring Assets Liabilities
Recognizing Measuring Goodwill Or Bargain
Post Acquisition Issues
Disclosure Requirements Acquisition Metho
Recording Business Combinations Ifrs
Financial Instruments Ifrs Disclosures
Derivatives
Hedging Fair Value Hedges Cash Flow Hedge
Introduction And Definitions
Import Transaction Export Transaction
Introduction To Forward And Option Contra
Natural Economic Hedge Hedging Forecasted
Speculation And Summary
Introduction To Conversion Of Foreign Fin
Background Operating Leases Capital Lease
Direct Financing Leases Sales Type Leases
Depreciation Bpo And Residuals Sale Lease
Introduction To Types Of Not For Profit E
Donations Pledges Contributions And Net A
Health Care Organizations Colleges And Un
Diagnostic Assessment Iv1
Introduction To Governmental Organization
Fund Accounting
Measurement Focus Basis Of Accounting
Budgetary Accounting Encumberance Account
Deferred Outflows And Deferred Inflows Of
Net Position And Fund Balance
Governmental Funds
Proprietary Funds
Fiduciary Funds
Post Assessment Iv1
Diagnostic Assessment Iv2
The Comprehensive Annual Financial Report
Determining The Financial Reporting Entit
Major Funds And Fund Level Reporting
Deriving Government Wide Financial Statem
Interfund Transactions Construction Proje
Long Term Liabilities Other Than Bonded D
Terminology And Nonexchange Transactions
Special Items Recent Developments
Post Assessment Iv2
Practice Exam A Testlet 1
Practice Exam A Testlet 2
Home
Flashcards
Teachers
Companies
About
Contact
Blog
Pricing
Terms
Help Center
Brainscape is a web and mobile study platform that helps you learn things faster. Our mission
is to create a smarter world by simplifying and accelerating the learning process. © 2019 Bold
Learning Solutions.
Certified Flashcards
A-Z Subjects Directory
Creators Directory

Current Liabilities

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Current Liabilities

Hochgeladen von

Copyright:

Verfügbare Formate

×

Humanities & Social Studies

Medical & Nursing

Air Traﬃc Control

Finance & Economics

Technology & Engineering

Food & Beverage

How would you like to start?

Just Get Smarter!

Sign Up via Email

First Name Last Name

Which best describes you?

Skip this Step

What is your current school?

School Name (e.g. University of G

Elementary (grades 1-5)

Middle (grades 6-8)

High (grades 9-12)

Other Health Professional

Skip this Step

Log in with Google

How would you like to start?

Sign Up via Email

First Name Last Name

Which best describes you?

Skip this Step

What is your current school?

School Name (e.g. University of G

Elementary (grades 1-5)

Middle (grades 6-8)

High (grades 9-12)

Other Health Professional

Skip this Step

Current Liabilities Flashcards Preview

How would you like to get started?

How would you like to get started?

Bake Co.'s trial balance included the following at December

The deferred income tax liability is not related to an asset

Black Corp.'s accounts payable at December 31, 20X4,

On December 27, 20X4, Black wrote and recorded checks to

Preadjusted balance in accounts payable $900,000

Equals ending accounts payable $1,450,000

In its Year 5 ﬁnancial statements, Cris Co. reported an

An analysis of the accrued interest payable account leads to the correct

Beginning balance + Interest expense - Interest payments = Ending balance

Gar, Inc.'s trial balance reﬂected the following liability

Accounts payable $19,000

The deferred income tax payable is based on temporary

In Gar's December 31, 20X5 balance sheet, the current

Accounts payable $19,000

Deferred taxes are classiﬁed as non-current.

Kew Co.'s accounts payable balance at December 31, 20X2

Goods shipped to Kew F.O.B. shipping point on December

Preadjusted balance $2,200,000

Total accounts payable $2,170,000

Kemp Co. must determine the December 31, 20X2, year-end

A store lease, effective December 16, 20X1, calls for ﬁxed

In its December 31, 20X2 balance sheet, Kemp should

Portion of the $500 advertising bill relating to December 20X2 $375

Lease rental ($1,200 × 1/2 of December) $600

Additional rental based on sales (.05)($550,000 − $300,000) $12,500

Total current liabilities $13,475

Hemple Co. maintains escrow accounts for various

Escrow liability beginning of year $500,000