ch13 - CPA Exam Questions Chapter 13 1. a. Packages of...

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CPA Exam Questions Chapter 13 1. a. Packages of candy sold 110,000 Times expected redemption rate × 60 % Equals protected coupons returned 66,000 Divided by coupons required for each toy 5 coupons Equals expected toys to be mailed = 13,200 Times net cost per toy ($.80 - .50) × .30 Liability on balance sheet at December 31, 2009 $3,960 2. d. 2009 and 2010 sales = $ 400,000 Warranty % 6 % 2009 and 2010 allowance $ 24,000 Actual expenditure (9,750 ) 12/31/10 remaining liability $ 14,250 3. d. The accrued interest at end of the first year, February 28, 2009, is $1,200 ($10,000 × 12% = $1,200). The interest for the remaining 10 months is compounded based on the carrying amount of the total liability at February 28, 2009, $11,200 ($10,000 principal plus the $1200 accrued interest). Therefore, the interest is $11,200 × 12% × 10/12 = $1,120 for the last 10 months. The accrued interest liability at December 31, 2009, would be the total interest for the two time periods, $1,200 + $1,120 = $2,320. 4.
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ch13 - CPA Exam Questions Chapter 13 1. a. Packages of...

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