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
Videos
Question
Chapter 8, Problem 8.27BE
To determine
To show: What the company will report for the foregoing on the income statement for the year.
To determine
To show: What Company will report for the foregoing on the year-end
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
(Learning Objective 4: Record and report current liabilities) Travis Publishingcompleted the following transactions for one subscriber during 2018:Oct 1 Sold a one-year subscription, collecting cash of $1,800, plus sales tax of 10%.The subscription will begin on October 1.Nov 15 Remitted (paid) the sales tax to the state of South Carolina.Dec 31 Made the necessary adjustment at year-end.Requirement1. Journalize these transactions (explanations not required). Then report any liability on thecompany’s balance sheet at December 31, 2018.
(Learning Objective 1, 2, 3, 4: Measure and report current liabilities) Sea AirMarine experienced these events during the current year.a. December revenue totaled $120,000; and, in addition, Sea Air collected sales tax of 5%.The tax amount will be sent to the state of Florida early in January.b. On August 31, Sea Air signed a six-month, 6% note payable to purchase a boat costing$86,000. The note requires payment of principal and interest at maturity.c. On August 31, Sea Air received cash of $2,400 in advance for service revenue. Thisrevenue will be earned evenly over six months.d. Revenues of $850,000 were covered by Sea Air’s service warranty. At January 1,accrued warranty payable was $11,800. During the year, Sea Air recorded warrantyexpense of $34,000 and paid warranty claims of $34,500.e. Sea Air owes $90,000 on a long-term note payable. At December 31, 10% interest forthe year plus $30,000 of this principal are payable within one year.Requirement1. For each item, indicate the…
(Learning Objective 3: Account for a short-term note payable) Quimby Sports Authority purchased inventory costing $30,000 by signing a 6% short-term, one-year note payable. Thepurchase occurred on July 31, 2018. Quimby pays annual interest each year on July 31. Journalizethe company’s (a) purchase of inventory; (b) accrual of interest expense on April 30, 2019, which isthe company’s fiscal year-end; and (c) payment of the note plus interest on July 31, 2019. (Roundyour answers to the nearest whole number.) (d) Show what the company would report for liabilitieson its balance sheet at April 30, 2019, and on its income statement for the year ended on that date
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
- (Learning Objective 3: Account for a short-term note payable) On June 1, 2019,Franklin Company purchased inventory costing $90,000 by signing an 8%, nine-month,short-term note payable. Franklin will pay the entire note (principal and interest) on the note’smaturity date. Journalize the company’s (a) purchase of inventory and (b) accrual of interest onthe note payable on December 31, 2019.arrow_forwardvsuit? year-end. 3. Journalize the company's payment of the note plus interest on December 31, 2018. S11-5 Determining current portion of long-term note payable Learning Objective 1 On January 1, Irving Company purchased equipment of $280,000 with a long-term note payable. The debt is payable in annual installments of $56,000 due on December 31 of each year. At the date of purchase, how will Irving Company report the note payable? o the Learning Obiective 2. C11arrow_forward(Learning Objective 3: Record note payable transactions) Dean Sales Companycompleted the following note payable transactions:2018Jul Purchased delivery truck costing $58,000 by issuing aone-year, 4% note payable.Dec 31 Accrued interest on the note payable.2019Jul 1 Paid the note payable at maturity.1Requirements1. How much interest expense must be accrued at December 31, 2018? (Round your answerto the nearest whole dollar.)2. Determine the amount of Dean Sales’ final payment on July 1, 2019.3. How much interest expense will Dean Sales report for 2018 and for 2019? (If needed,round your answer to the nearest whole dollar.)arrow_forward
- (Learning Objective 6: Account for notes receivable)1. Compute the amount of interest during 2018, 2019, and 2020 for the following notereceivable: On May 31, 2018, Wyoming State Bank loaned $240,000 to Lindsey Weston ona two-year, 8% note.2. Which party has a/ana. note receivable?b. note payable?c. interest revenue?d. interest expense?3. How much in total would Wyoming State Bank collect if Lindsey Weston paid off the noteearly on November 30, 2018?arrow_forwardThe Happy Toddlers is a preparatory school for children three to five years old. Students are enrolled for a school year. Operations started on June 1. Parents can pay the full tuition fee of P70,000 each at the start of the every semester (June 1 and November 1.) Of the 150 students enrolled, 80 are paid in full at the start of the year. The remaining students are on installment basis. One school year runs from June 1 to March 31. Required:Determine the tuition fee revenue for the period December 31. This is the first year of Happy Toddlers operations.arrow_forwardOn July 1, Year 1, the Barley Company loaned $50,000 to the Jackson Co. The note has a stated interest rate of 10% and will mature on June 30, Year 2. All payments for principal and interest will be received at maturity. How much interest revenue will Barley report on its income statement for the year ended December 31, Year 1?arrow_forward
- E 6arrow_forwardLearning Objective 1, 2, 3, 4: Record liability-related transactions) The followingtransactions of Smooth Sounds Music Company occurred during 2018 and 2019:2018Mar 3 Purchased a piano (inventory) for $65,000, signing a six-month, 8%note payable.May 31 Borrowed $105,000 on an 6% one-year note payable.Sep 3 Paid the six-month, 8% note at maturity.Dec 31 Accrued warranty expense, which is estimated at 1.5% of sales of $193,000.31 Accrued interest on the outstanding note payable.2019May 31 Paid the outstanding note payable at maturity.Requirement1. Record the transactions in Smooth Sounds’ journal. Explanations are not requiredarrow_forwardOn January 1, Year 1, Brown Company borrowed cash from First Bank by issuing a $107,000 face-value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,879 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $59,000 cash per year. b. Prepare an income statement and balance sheetfor each of the four years. Rent revenue is collected in cash at the end of each year. (Hint: Record the transactions for each year in T-accounts before preparing the financial statements.)arrow_forward
- The following transactions apply to Walnut Enterprises for 2018, its first year of operations: Received $50,000 cash from the issue of a short-term note with a 6 percent interest rate and a one-year maturity. The note was made on April 1, 2018. Received $130,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. Paid $62,000 cash for other operating expenses during the year. Paid the sales tax due on $110,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until 2019. Recognized the accrued interest at December 31, 2018. The following transactions apply to Walnut Enterprises for 2019: Paid the balance of the sales tax due for 2018. Received $201,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. Repaid the principal of the note and applicable interest on April 1, 2019. Paid $102,500 of other operating expenses…arrow_forwardOn August 1, your company takes a $10,000 note that requires your firm to repay principal and accrued interest of 8% a year at the end of 4 years. Which entry should you record at the end of this year? a. Interest Expense 800 Cash 800 b. Interest Expense Interest Payable c. Interest Expense Payable Interest Payable d. Interest Expense Interest 333 333 800 800 467 467arrow_forwardOn November 1, 2021, Aviation Training Corp. borrows $60,000 cash from Community Savings and Loan. Aviation Training signs a three-month, 7% note payable. Interest is payable at maturity. Aviation’s year-end is December 31.Required:1. Record the note payable by Aviation Training.2. Record the appropriate adjustment for the note by Aviation Training on December 31, 2021.3. Record the payment of the note at maturity.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY