Explain the reason for representation of “gift cards”, which is listed as current liabilities.

Question

Want to see the full answer?

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 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

c.

To determine

Compute the current ratio for each company.

d.

To determine

Compute the quick ratio for each company.

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Calculate the selling price solution this question

Roth Inc. has a deferred tax liability of $68,000 at the beginning of 2013. At the end of 2013, it reports accounts receivable on the books at $90,000 and the tax basis at zero (its only temporary difference). If the enacted tax rate is 34% for all periods, and income taxes payable for the period is $230,000, determine the amount of total income tax expense to report for 2013.

Oxford Corporation began operations in 2012 and reported a pretax financial income of $225,000 for the year. Oxford's tax depreciation exceeded its book depreciation by $40,000. Oxford's tax rate for 2012 and years thereafter is 30%. In its December 31, 2012, balance sheet, what amount of deferred tax liability should be reported?

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 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

c.

To determine

Compute the current ratio for each company.

d.

To determine

Compute the quick ratio for each company.

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

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 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

c.

To determine

Compute the current ratio for each company.

d.

To determine

Compute the quick ratio for each company.

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

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 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

c.

To determine

Compute the current ratio for each company.

d.

To determine

Compute the quick ratio for each company.

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 10, Problem 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

c.

To determine

Compute the current ratio for each company.

d.

To determine

Compute the quick ratio for each company.

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Answer 6

Chapter 10, Problem 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

Answer 7

Chapter 10, Problem 5MAD

a.

To determine

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

Answer 8

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

Answer 9

b.

To determine

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

Answer 10

c.

To determine

Compute the current ratio for each company.

Answer 11

c.

To determine

Compute the current ratio for each company.

Answer 12

d.

To determine

Compute the quick ratio for each company.

Answer 13

d.

To determine

Compute the quick ratio for each company.

Answer 14

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Answer 15

e.

To determine

Compare the two company’s results of current ratio and quick ratio.

Answer 16

Expert Solution & Answer

Answer 17

Expert Solution & Answer

Answer 18

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 19

Ch. 10 - Does a discounted note payable provide credit...Ch. 10 - Employees are subject to taxes withheld from their...Ch. 10 - Prob. 3DQ Ch. 10 - Prob. 4DQ Ch. 10 - Prob. 5DQ Ch. 10 - Prob. 6DQ Ch. 10 - Prob. 7DQ Ch. 10 - Installment notes require equal periodic payments....Ch. 10 - Prob. 9DQ Ch. 10 - Prob. 10DQ

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

Solution Summary: The author explains that gift cards represent unearned revenue and deferred revenues. Credit card loans are short-term receivables of company.

Concept explainers

Videos

Explain the reason for representation of “gift cards”, which is listed as current liabilities.

Indicate whether the “credit card loans” can be considered as part of quick assets for Company C’s computation of the quick ratios.

Compute the current ratio for each company.

Compute the quick ratio for each company.

Compare the two company’s results of current ratio and quick ratio.

Want to see the full answer?

Chapter 10 Solutions