Lecture 9

Maggie Sharrer Company borrows R$88,500 on September 1, 2014, from Sandwich Bank by signing an R$88,500, 12%, one-year note. What is the accrued interest at December 31, 2014?

• R$3,540.

• R$4,425.

• R$10,620.

• R$2,655.

Becky Sherrick Company has total proceeds from sales of $4,515. If the proceeds include sales taxes of 5%, the amount to be credited to Sales Revenue is:

• $4,289.25.

• $4,000.

• $4,300.

• No correct answer given.

Sensible Insurance Company collected a premium of £18,000 for a 1-year insurance policy on April 1. What amount should Sensible report as a current liability for Unearned Service Revenue at December 31?

• £18,000.

• £4,500.

• £13,500.

• £0.

A debt due within 6 months of the statement of financial position date which is expected to be paid out of cash will be classified as a current liability.

• True

• False

A £2,000,000, 7%, 6-month note payable requires an interest payment of £140,000 at maturity.

• True

• False

A $30,000, 8%, 9-month note payable requires an interest payment of $1,800 at maturity.

• True

• False

Metropolitan Symphony sells 200 season tickets for $60,000 that represents a five-concert season. The amount of Unearned Ticket Revenue after the second concert is $24,000.

• True

• False

During the month, a company sells goods for a total of $108,000, which includes sales taxes of $8,000; therefore, the company should recognize $100,000 in Sales Revenue and $8,000 in Sales Tax Expense.

• True

• False

Current maturities of long-term debt refers to the amount of interest on a note payable that must be paid in the current year.

• True

• False

If a retailer sells goods for a total price of €600, which includes an 11% sales tax, the amount of the sales tax is €59.46.

• True

• False