BE11-1 Jamison Company has the following obligations at December 31: (a) a note pay able for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability. (Assume an operating cycle of less than one year.) BE11-2 Peralta Company borrows $60,000 on July 1 from the bank by signing a $60,000, 10%, one-year note payable. (a) Prepare the journal entry to record the proceeds of the note. (b) Prepare the journal entry to record accrued interest at December 31, assuming adjust ing entries are made only at the end of the year. BE11-3 Coghlan Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $16,380. All sales are subject to a 5% sales tax. Compute sales taxes payable, and make the entry to record sales taxes payable and sales revenue. BE11-4 Derby University sells 4,000 season basketball tickets at $210 each for its 12-game home schedule. Give the entry to record (a) the sale of the season tickets and (b) the reve nue recognized by playing the first home game. BE11-5 Yahoo! Inc.'s recent financial statements contain the following selected data (in thousands). Current assets Total assets $4,594,772 14,936,030 Compute (a) working capital and (b) current ratio. Current liabilities Total liabilities $1,717,728 2,417,394 BE11-6 On December 1, Bruney Company introduces a new product that includes a one year warranty on parts. In December, 1.000 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $90 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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BE11-1 Jamison Company has the following obligations at December 31: (a) a note pay able for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten $30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d) accounts payable of $60,000. For each obligation, indicate whether it should be classified as a current liability. (Assume an operating cycle of less than one year.)

BE11-2 Peralta Company borrows $60,000 on July 1 from the bank by signing a $60,000,

10%, one-year note payable.

(a) Prepare the journal entry to record the proceeds of the note.

(b) Prepare the journal entry to record accrued interest at December 31, assuming adjust

ing entries are made only at the end of the year.

BE11-3 Coghlan Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $16,380. All sales are subject to a 5% sales tax. Compute sales taxes payable, and make the entry to record sales taxes payable and sales revenue.

BE11-4 Derby University sells 4,000 season basketball tickets at $210 each for its 12-game

home schedule. Give the entry to record (a) the sale of the season tickets and (b) the reve

nue recognized by playing the first home game.

BE11-5 Yahoo! Inc.'s recent financial statements contain the following selected data (in

thousands).

Current assets Total assets

$4,594,772 14,936,030

Compute (a) working capital and (b) current ratio.

Current liabilities Total liabilities

$1,717,728 2,417,394

BE11-6 On December 1, Bruney Company introduces a new product that includes a one year warranty on parts. In December, 1.000 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $90 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.

BRIEF EXERCISES
BE11-1 Jamison Company has the following obligations at December 31: (a) a note pay-
able for $100,000 due in 2 years, (b) a 10-year mortgage payable of $300,000 payable in ten
$30,000 annual payments, (c) interest payable of $15,000 on the mortgage, and (d)
accounts payable of $60,000. For each obligation, indicate whether it should be classified
as a current liability. (Assume an operating cycle of less than one year.)
Identify whether obligations
are current liabilities.
(LO 1)
BE11-2 Peralta Company borrows $60,000 on July 1 from the bank by signing a $60,000, Prepare entries for an interest-
10%, one-year note payable.
bearing note payable.
(LO 1)
(a) Prepare the journal entry to record the proceeds of the note.
(b) Prepare the journal entry to record accrued interest at December 31, assuming adjust-
ing entries are made only at the end of the year.
BE11-3 Coghlan Auto Supply does not segregate sales and sales taxes at the time of sale.
The register total for March 16 is $16,380. All sales are subject to a 5% sales tax. Compute
sales taxes payable, and make the entry to record sales taxes payable and sales revenue.
Compute and record sales
taxes payable.
(LO 1)
BE11-4 Derby University sells 4,000 season basketball tickets at $210 each for its 12-game Prepare entries for unearned
home schedule. Give the entry to record (a) the sale of the season tickets and (b) the reve-
nue recognized by playing the first home game.
revenues.
(LO 1)
BE11-5 Yahoo! Inc.'s recent financial statements contain the following selected data (in
thousands).
Analyze liquidity.
(LO 2)
$ 4,594,772
Current liabilities $1,717,728
2,417,394
Current assets
Total assets
14,936,030
Total liabilities
Compute (a) working capital and (b) current ratio.
BE11-6 On December 1, Bruney Company introduces a new product that includes a one-
year warranty on parts. In December, 1,000 units are sold. Management believes that 5%
of the units will be defective and that the average warranty costs will be $90 per unit.
Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.
Prepare adjusting entry for
warranty costs.
(LO 2)

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