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Exam 9: Reporting and Interpreting Liabilities

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Question 71

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The following is a partial list of account balances for Coen, Inc. as of December 31, 2016 Required: Prepare the liabilities section of Coen Inc.'s classified balance sheet for December 31, 2016.

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Question 72

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When a company receives cash before products or services are provided the following results:

A) Assets and stockholders' equity increase.
B) Assets and revenue increase.
C) Liabilities and revenues increase.
D) Liabilities and assets increase.

E) A) and B)
F) A) and C)

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Question 73

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Alden Trucking Company is replacing part of its fleet of trucks by purchasing them under a note agreement with Kenworthy on January 1, 2016. Alden financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2016 and continuing for a total of four more years (final payment December 31, 2020) . Kenworthy will charge Alden Trucking Company the market interest rate of 10% compounded annually. On January 1, 2016, Alden will record a note payable in the amount of:

Short Company purchased land by paying $10,000 cash on the purchase date and agreeing to pay $10,000 for each of the next ten years beginning one-year from the purchase date. Short's incremental borrowing rate is 10%. On the balance sheet as of the purchase date, after the initial $10,000 payment was made, the liability reported is closest to:

Huck Corporation is looking to purchase a truck costing $49,000 by agreeing to make payments every three months for the next two years. The first payment is due three months after the purchase date. Huck's incremental borrowing rate is 8%. Each of the payments is closest to:

You have a goal of having $100,000 five years from today. The return on the investment is expected to be 10% and will be compounded semi-annually. The amount that needs to be invested today is closest to:

A company's income statement reported income tax expense of $200,000 during 2016. The deferred tax liability on the balance sheet increased $20,000 during 2016. How much was the company's tax liability during 2016?

Which of the following correctly describes the accounting for leases?

Income taxes payable is an example of an accrued liability.