Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

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Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

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Hanks Company estimates its manufacturing overhead to be $450,000 and its direct labor costs to be $300,000 for year 5. Hanks worked three jobs for the year. Job 5-1, which was sold during year 5, had actual direct labor costs of $90,000. Job 5-2, which was completed but not sold at the end of the year, had actual direct labor costs of $140,000. Job 5-3, which is still in work-in-process inventory, had actual direct labor costs of $80,000. The actual manufacturing overhead for year 5 was $470,000. Manufacturing overhead is applied on the basis of direct labor costs. a) How much overhead was applied to each job in year 5? b) What was the over-or underapplied manufacturing overhead for year 5?

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Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

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Answer 5

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

Answer 6

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

Answer 7

Chapter 10, Problem 1STQ

To determine

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Answer 8

Expert Solution & Answer

Answer to Problem 1STQ

a. The obligation matures.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Liabilities: The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Owner’s equity: Owner’s equity refers to the right the owners possess over the resources of the business. Revenues and the expenses are the components of the owner’s equity.

a. The obligation of liability will matures after certain period but there is no maturity for owners’ equity. Hence, it is correct option.
b. Interest paid to the provider of the capital is deductible in the determination of taxable income. Interest paid is a settlement of obligation. Thus, the given statement is a characteristic of liability. Hence, it is correct option.
c. The capital providers’ claims are residual in the event of liquidation of the business. It is a characteristic of equity not liability. Hence, it is incorrect option.
d. The capital providers normally have the right to exercise control over business operations. It is a characteristic of equity not liability. Hence, it is incorrect option.

Answer 12

Ch. 10 - Prob. 1STQ Ch. 10 - Prob. 2STQ Ch. 10 - Prob. 3STQ Ch. 10 - Prob. 4STQ Ch. 10 - Prob. 5STQ Ch. 10 - Prob. 6STQ Ch. 10 - Prob. 7STQ Ch. 10 - Prob. 8STQ Ch. 10 - Prob. 9STQ Ch. 10 - Prob. 10STQ

Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

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Find which of the given statement is belongs to the characteristic of liabilities rather than of equity.

Answer to Problem 1STQ

Explanation of Solution

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