WorksheetsChapter 11
Total questions: 10
Worksheet time: 5mins
Liabilities must
sometimes be estimated.
be for specific, known amounts.
involve an outflow of cash.
be obligations that are certain to be owed.
On July 1, 20X8, your company borrowed $20,000 on a four-year, 6% note payable. At December 31, 20X8, a journal entry should be made to record
a note payable of $20,000.
interest payable of $1,200.
interest payable of $600.
cash payment of $1,200.
The employee is responsible for which of the following payroll taxes?
Federal and state income tax
State unemployment taxes
Federal unemployment taxes
All of the above
Cloud Company has a lawsuit pending from a customer claiming damages of $128,000. Cloud’s attorney advises that the likelihood the customer will win is reasonably possible. How is this contingent liability reported?
It should be described in the footnotes.
It should be recorded as an asset and a liability based on estimated amounts.
It should be recorded as an expense and a liability based on estimated amounts.
It should not be disclosed.
At December 31, your company owes employees for four days of the five-day workweek. The total payroll for the week is $51,000. What journal entry should you make at December 31?
Nothing because you will pay the employees on Friday.
Salaries and Wages Expense (dr) 51,000
Salaries and Wages Payable (cr) 51,000
Salaries and Wages Payable (dr) 40,800
Salaries and Wages Expense (cr) 40,800
Salaries and Wages Expense (dr) 40,800
Salaries and Wages Payable (cr) 40,800
During 20X8, Crystal Glassware reported net income of $123,000, income tax expense of $25,000, and interest expense of $11,000. What is Crystal Glassware’s times-interest-earned ratio for 20X8? (Round to one decimal place.)
7.9
11.2
13.5
14.5
As of January 1, 20X9, Darnell’s Deliveries owes $60,000 on a truck purchased for use by the business. The company makes principal payments of $1,000 each month plus interest at 8%. At the end of 20X9, after the first 12 months’ payments of principal and interest, which of the following would be included on the balance sheet for December 31, 20X9?
Long-term Liabilities $48,000 and Interest Payable for four years’ interest.
Long-term Liabilities $36,000; Current Liabilities $12,000; and Interest Payable for four years’ interest.
Long-term Liabilities $36,000; Current Liabilities $12,000; and no Interest Payable
Long-term Liabilities $48,000 and no Interest Payable
Rudy’s Fitness Gym has Unearned Revenue of $15,000, Salaries Payable of $28,000, and Allowance for Uncollectible Accounts of $4,200. What amount would Rudy’s Gym report as total current liabilities?
$47,200
$43,000
$32,200
$28,000
Cooper Company owed Estimated Warranty Payable of $2,200 at the end of 20X4. During 20X5, Cooper Company made sales of $280,000 and expects product warranties to cost the company 3% of the sales. During 20X5, Cooper Company paid $5,000 for warranties. What is Cooper Company’s estimated warranty payable at the end of 20X5?
$10,600
$ 5,600
$ 5,000
$ 3,600
Alpine Company sells $50,000 of goods, and you collect sales tax of 7%. What is the journal entry to record the transaction?
DR Cash $50,000, DR Sales tax expense $3,500, CR Sales revenue $53,500
DR Cash $50,000, DR Sales tax expense $3,500, CR Sales revenue $50,000, CR Sales tax payable $3,500
DR Cash $50,000, DR Sales tax payable $3,500, CR Sales revenue $53,500
DR Cash $53,500, DR Sales tax payable $3,500, CR Sales revenue $53,500
