Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 8, Problem 6QC
Nicholas Corporation accrues the interest expense on a short-term note payable at the end of its fiscal year. Due to this transaction
a. current liabilities will decrease and stockholders’ equity will decrease.
b. current liabilities will increase and stockholders’ equity will decrease.
c. current liabilities will increase and current assets will increase.
d. current liabilities will increase and stockholders’ equity will increase.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Assume that Denis Savard Inc. has the following accounts at the end of the current year.
1.
2.
3.
4
5.
6.
7.
8.
9.
10.
11.
12.
Common Stock.
Discount on Bonds Payable.
Treasury Stock (at cost).
Notes Payable (short-term).
Raw Materials.
Equity Investments (long-term).
Unearned Rent Revenue.
Work in Process.
Copyrights.
Buildings.
Notes Receivable (short-term).
Cash.
Current Assets
Cash
13.
Less
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
Prepare a classified balance sheet in good form. (No monetary amounts are necessary.) (For Land, Treasury Stock, Notes
Payable, Preferred Stock Investments, Notes Receivable, Receivables-Officers, Inventory, Bonds Payable, and Restricted Cash,
enter the account name only and do not provide the descriptive information provided in the question.)
Salaries and Wages Payable.
Accumulated Depreciation-Buildings.
Restricted Cash for Plant Expansion..
Land Held for Future Plant Site.
Allowance for Doubtful Accounts.
Retained Earnings.
Paid-in Capital in Excess…
b. Prepare a pro forma balance sheet for next year, using the information given and the judgmental approach. Include a reconciliation of the retained earnings account. ???
NOTE: Taxes payable for last year are about
19.6443%
of last year's taxes on the income statement. The pro forma value is obtained by taking
19.6443%
of next year's taxes.
Complete the assets part of the pro forma balance sheet for next year: (Round to the nearest dollar.)
Pro Forma Balance Sheet
Provincial Imports, Inc.
for Next Year
(Judgmental Method)
Cash
$
Marketable securities
Accounts receivable
Inventories
Total current assets
$
Net fixed assets
Total assets
$
Which of the following items we appear as current liabilities in a company’s statement of financial position?
a.
Loan due for repayment within one year, trade payables, drawings
b.
Loan due for repayment within one year, trade payables, accruals
c.
Loan due for repayment within one year, trade payables and trade receivables
d.
Loan due for repayment within one year, trade payables and capital
Chapter 8 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 8 - All of the following are reported as current...Ch. 8 - Prob. 2QCCh. 8 - Prob. 3QCCh. 8 - What is accounts payable turnover? a.Purchases on...Ch. 8 - Prob. 5QCCh. 8 - Nicholas Corporation accrues the interest expense...Ch. 8 - Phoebe Corporation signed a six-month note payable...Ch. 8 - Prob. 8QCCh. 8 - Backpack Co. was organized to sell a single...Ch. 8 - Prob. 10QC
Ch. 8 - Potential liabilities that depend on future events...Ch. 8 - A contingent liability should be recorded in the...Ch. 8 - Prob. 8.1ECCh. 8 - Prob. 8.1SCh. 8 - Prob. 8.2SCh. 8 - Prob. 8.3SCh. 8 - Prob. 8.4SCh. 8 - (Learning Objective 3: Account for a short-term...Ch. 8 - Prob. 8.6SCh. 8 - (Learning Objective 4: Report warranties in the...Ch. 8 - (Learning Objective 4: Account for accrued...Ch. 8 - (Learning Objective 5: Interpret a companys...Ch. 8 - Prob. 8.10AECh. 8 - Prob. 8.11AECh. 8 - LO 3 (Learning Objective 3: Purchase inventory,...Ch. 8 - (Learning Objective 3: Record note payable...Ch. 8 - (Learning Objective 3: Account for a short-term...Ch. 8 - Prob. 8.15AECh. 8 - Prob. 8.16AECh. 8 - Prob. 8.17AECh. 8 - Prob. 8.18AECh. 8 - Prob. 8.19AECh. 8 - Prob. 8.20BECh. 8 - Prob. 8.21BECh. 8 - LO 3 (Learning Objective 3: Purchase inventory,...Ch. 8 - Prob. 8.23BECh. 8 - Prob. 8.24BECh. 8 - Prob. 8.25BECh. 8 - Prob. 8.26BECh. 8 - Prob. 8.27BECh. 8 - (Learning Objectives 1, 2, 3, 4: Report current...Ch. 8 - Prob. 8.29BECh. 8 - Prob. 8.30QCh. 8 - For the purpose of classifying liabilities as...Ch. 8 - Prob. 8.32QCh. 8 - Prob. 8.33QCh. 8 - Prob. 8.34QCh. 8 - Prob. 8.35QCh. 8 - Prob. 8.36QCh. 8 - Prob. 8.37QCh. 8 - Prob. 8.38QCh. 8 - Prob. 8.39QCh. 8 - Prob. 8.40QCh. 8 - Prob. 8.41QCh. 8 - Prob. 8.42QCh. 8 - Prob. 8.43QCh. 8 - Group A LO 1, 2, 3, 4 (Learning Objective 1, 2, 3,...Ch. 8 - Prob. 8.45APCh. 8 - LO 1, 2, 3, 4 (Learning Objectives 1, 2, 3, 4:...Ch. 8 - LO 4, 5 (Learning Objectives 4, 5: Account for...Ch. 8 - Group B LO 1, 2, 3, 4 (Learning Objectives 1, 2,...Ch. 8 - Prob. 8.49BPCh. 8 - Prob. 8.50BPCh. 8 - Prob. 8.51BPCh. 8 - Prob. 8.52CEPCh. 8 - Prob. 8.53SCCh. 8 - Prob. 8.54DCCh. 8 - Prob. 8.55DCCh. 8 - Prob. 8.56EICCh. 8 - Prob. 1FFCh. 8 - Prob. 1GP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- REQUIRED Use the information provided in below to answer the following questions for the financial year ended 31 December 2023. Note: Answers to the ratios must be expressed to two decimal places. Comment on the management of debtors and creditors after calculating the relevant ratios. Determine the percentage of the profit after tax that has been retained by the company. Calculate the return on capital employed and comment on your answer. Would prospective lenders be concerned about the relative proportion of borrowed capital and own capital? Motivate your answer by calculating the relevant ratio. Calculate the ratio that measures the efficiency with which the non-current and current assets of company were managed. Comment on the ability of the company to settle its short-term debts under distress conditions. Use a relevant ratio to motivate your answer. INFORMATION The following information was obtained from the financial records of Fiona Limited:arrow_forwardRequired: 1. Calculate the total current assets at December 31, 2021. 2. Calculate the total liabilities and stockholders' equity at December 31, 2021. 3. Calculate the earnings from operations (operating income) for the year ended December 31, 2021. 4. Calculate the net income (or loss) for the year ended December 31, 2021. 5. What was the average income tax rate for the company for 2021? 6. If 48,000 of dividends had been declared and paid during the year, what was the January 1, 2021, balance of retained earnings? Assume that all balance sheet items reflect account balances at December 31, 2021 of ABC Ind, and that all income statement items reflect activities that occurred during the year then ended. Accounts receivable Depreciation expense Land Cost of goods sold Retained earnings Cash Equipment Supplies Accounts payable Service revenue Interest expense Common stock Income tax expense Accumulated depreciation Long-term debt Supplies expense Merchandise inventory Net sales 99,000…arrow_forwardA company's net income before interest & tax was OMR 400000 for its most recent year. The company's income statement showed Income Tax Expense of OMR 140000 and Interest Expense of OMR 60000. At the beginning of the year the company's shareholders' equity was OMR 1900000 and at the end of the year it was OMR 2100000. Long term loan ( Debt) was OMR 800000. Calculate Interest coverage ratio. Select one: a. 4.3 b. 3.3 c. 6.6 d. 48.3arrow_forward
- Which of the following increases the current assets of a business entity? A) Consumable inventory B) Bank (credit balance) C) Investment (with a maturity date of more than one year hance) D) Deferred incomearrow_forwardFollow up question. Anwser D E F d. Calculate the net income (or loss) for the year ended December 31, 2022 e. What was the average income tax rate for Gary's TV for 2022? F If $26,000 of dividends had been declared and paid during the year, what was the January 1, 2022, balance of retained earnings?arrow_forwardREQUIRED Use the information provided below to calculate the ratios for 2021 (expressed to two decimal places) that would reflect each of the following: The time taken by the company to settle its debts with trade The amount of debt that the company uses to finance its The operational effectiveness of the company before considering interest income, interest expense and company tax. The percentage of the profit that has been put back into the What investors are willing to pay for the shares of the company with due consideration given to the profit generated by each share in the company. Comment on the FIVE (5) ratios of Oslo Limited as compared to the industry average provided in the additional information. INFORMATION The information given below was extracted from the books of Oslo Limited:…arrow_forward
- a. Given the debtor's collection period, stock days on hand and creditors payment period for 2020 are 46,60 and 46.34 respectively, calculate the debtor's collection period, stock days on hand and creditors payment period for 2021 also. Analyse why the ratios changed for the two years. b. Suggest ways to improve the financial ratios.arrow_forwardThis year, Game Co. took advantage of market conditions to refund its outstanding debt. Game should report the excess of the carrying amount of the old debt over the amount paid to extinguish it as a(n) a. deferred credit to be amortized over life of new debt. b. part of continuing operations. c. prior period adjustment. d. extraordinary item, net of income taxes.arrow_forwardConsidering that the credit policy of Steward (Pty) Ltd is 90 days, which one of the following statements is true when analysing the debtor’s collection period? A. The debtor’s collection period improved from 2020 to 2021, and the company is still collecting debtors within their credit policy terms of 90 days. B. The debtor’s collection period improved from 2020 to 2021, which is also good for the cash flow of the company. C. The debtor’s collection period worsened from 2020 to 2021, and the company is not collecting debtors within their credit policy terms of 90 days. D. The debtor’s collection period worsened from 2020 to 2021, but debtor’s are collected within their credit policy terms of 90 days. E. The debtor’s collection period remained constant from 2020 to 2021.arrow_forward
- Diligent Company reported the following account balances on December 31, 2020: Accounts payable - 1,900,000; Bonds payable - 3,400,000; Discount on bonds payable - 200,000; Share dividend payable - 500,000; Withholding taxes payable - 900,000. On December 31, 2000, what total amount should be reported as current liabilities?arrow_forwardCash Accounts Receivable Allowance for doubtful accounts Geronimo Company Balance Sheet As of July 31, 2023 78,000 142,000 8,500 Trading Securities (fair value) 20,000 Prepaid insurance 12,000 Property Plant and Equipment Accumulated Depreciation Notes Payable Bonds payable Common Stock Paid in Capital in excess of par value 230,000 Retained Earnings 101,000 Accumulated Other Comprehensive Equity Investments 25,000 Trademarks 44,000 27,500 Use the balance sheet above and the following additional information to answer questions A through E: 1. Cash includes $50,000 deposited in a bond sinking fund 2. Trading securities have a cost of $15,000. 3. Management intends to hold the Equity Investments long-term 4. The note payable matures in 90 days, however, management has executed a contractual agreement to refinance and convert the debt to long-term. 680,000 218,000 Accounts Payable Unearned Revenue 250,000 35,000 16,000 Income Treasury Stock 120,000 400,000 100,000 5. The Bond Payable will…arrow_forwardThe following information is provided concerning the accounts of Jazzy Ltd .You are asked to identify how each of these items is shown in the financial statements. (a) gain on revaluation of available-for-sale investments (b) dividends paid during the year (c) revaluation gain on building (not reversing any previous revaluation) (d) transfer to dividend equalisation reserve (e) Unsecured notes issuedarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License