ch9 hw answers

ch9 hw answers - CHAPTER 9 HOMEWORK: Multiple Choice(Page...

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CHAPTER 9 HOMEWORK: Multiple Choice(Page 474): 1 . a 2. a 3. b 4. b 5. b 6. a 7. a 8. b 9. b 10. b E9-1A For each item in the list below, tell whether it is a definitely determinable liability, an estimated liability or neither. a. Definitely determinable liability b. Estimated liability c. Estimated liability d. Definitely determinable liability e. Definitely determinable liability E9-4A a. Record estimated Warranty Liability at Dec. 31. No. of puppies 1,500 Percent w/ vet bills 10 % 150 x Average bill $100 Est. warranty liability $15,000 Journal entry: Debit Credit
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Warranty Expense 15,000 Estimated Warranty Liability 15,000 b. Record payment of the vet bill on March 30, 2007. Journal entry: Debit Credit Estimated Warranty Liability 50 Cash 50 c. How did this payment effect financial statements? The entry decreased current assets and current liabilities on the balance sheet but had no impact on income statement. P9-4A a. For each loan described, prepare an amortization schedule for the first four payments. 1. Principal $25,000 Effective rate 8.50% Cash Principal Principal Year payment Interest reduction balance 1 $6,344 $2,125 $4,219 $20,781 2 $6,344 $1,766 $4,578 $16,203 3 $6,344 $1,377 $4,967 $11,237 4 $6,344 $955 $5,389 $5,848 2. Principal $120,000 Effective rate 7.25% Cash Principal Principal Year payment Interest reduction balance 1 $17,283 $8,700 $8,583 $111,417 2 $17,283 $8,078 $9,205 $102,212 3 $17,283 $7,410 $9,873 $92,339 4 $17,283 $6,695 $10,588 $81,751
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b. What total interest expense related to these two loans would SD Company show on its income statement for the year ended December 31, 2006? Interest expense Interest expense for 12 months Portion in 2006 2006 1. $2,125 10/12 $1,771 2. $8,700 3/12 $2,175 $3,946 c. How much Interest Payable would be shown on SD's balance sheet at December 31, 2006? 1.
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ch9 hw answers - CHAPTER 9 HOMEWORK: Multiple Choice(Page...

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