Chapter 9
Reporting and Analyzing
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Current Liabilities
Quick Study 9-11 (10 minutes)
Times interest earned = =
Interpretation:
PROBLEM SET A
Problem 9-1A (45 minutes)
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Frier |
Com. Bank |
UMB |
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Maturity dates |
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Date of the note |
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Term of the note (in days) |
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Maturity date |
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| 2. |
Interest due at maturity |
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Principal of the note |
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Annual interest rate |
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Fraction of year |
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Interest expense |
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| 3. |
Accrued interest on UMB note at the end of 2010
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Total interest for note |
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Fraction of term in 2010 |
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Accrued interest expense |
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| 4. |
Interest on UMB note in 2011 |
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Total interest for note |
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Fraction of term in 2011 |
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Interest expense in 2011 |
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5.
2010 You can show your calculations in your journal entry descriptions.
The terms regarding the notes payable should be in the descriptions as well
| Apr. 20 |
Merchandise Inventory |
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Accounts PayableFrier
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| May 19 |
Accounts PayableFrier
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Cash |
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Notes PayableFrier |
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| July 8 |
Cash |
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Notes PayableCommunity |
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| Aug. 17 |
Interest Expense |
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Notes PayableFrier |
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Cash |
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| Nov. 5 |
Interest Expense |
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Notes PayableCommunity |
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Cash |
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Cash |
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Notes PayableUMB Bank |
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| Dec. 31 |
Interest Expense |
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Interest Payable |
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2011
| Jan. 27 |
Interest Expense |
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Notes PayableUMB Bank
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Interest Payable |
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Cash
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Problem 9-2A (40 minutes) You can show your calculations in your journal entry descriptions.
1.
2010
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Cost of Goods Sold
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Merchandise Inventory |
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| 30 |
Warranty Expense |
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Estimated Warranty Liability |
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| Dec. 9 |
Estimated Warranty Liability |
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Merchandise Inventory |
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| 16 |
Cost of Goods Sold
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Merchandise Inventory |
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| 29 |
Estimated Warranty Liability |
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Merchandise Inventory |
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| 31 |
Warranty Expense |
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Estimated Warranty Liability |
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| 5 |
Cost of Goods Sold |
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Merchandise Inventory |
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2011
| 17 |
Estimated Warranty Liability |
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Merchandise Inventory |
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Warranty Expense |
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Estimated Warranty Liability |
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2. for November 2010 and December 2010
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Sales |
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Warranty Expense
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| December
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| Total
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3. Warranty expense for January 2011
Sales in January
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| Warranty percent |
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| Warranty expense |
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