CHAPTER%2013%20-%20SOLUTIONS%20TO%20EXTRA%20EXERCISES

CHAPTER%2013%20-%20SOLUTIONS%20TO%20EXTRA%20EXERCISES -...

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SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 13-2 11/1/07 Cash. ............................................................................... ......................................................................................... 50,000 Notes Payable. ................................................... 50,000 12/31/07 Interest Expense. ........................................................... 750 Interest Payable. ................................................ 750 ($50,000 X 9% X 2/12) 2/1/08 Notes Payable. ............................................................... 50,000 Interest Payable. ............................................................ 750 Interest Expense. ........................................................... 375 Cash. ................................................................... 51,125 [($50,000 X 9% X 3/12) + $50,000] BRIEF EXERCISE 13-3 11/1/07 Cash. .................................................................................. ............................................................................................ 50,000 Discount on Notes Payable. ............................................ 1,125 Notes Payable. ...................................................... 51,125 12/31/07 Interest Expense. .............................................................. 750 Discount on Notes Payable. ................................. 750 ($1,125 X 2/3) 2/1/08 Interest Expense. ................................................................. 375 Discount on Notes Payable. .................................... 375 Notes Payable. ..................................................................... 51,125 Cash. ......................................................................... 51,125 BRIEF EXERCISE 13-4 (a) Since both criteria are met (intent and ability ), none of the $500,000 would be reported as a current liability. The entire amount would be reported as a long-term liability. (b) Because repayment of the note payable required the use of existing 12/31/07 current assets, the entire $500,000 liability must be reported as current. (This assumes Fifa had not entered into a long-term agreement prior to issuance)
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BRIEF EXERCISE 13-5 8/1/07 Cash. .................................................................................. ............................................................................................ 180,000 Unearned Subscription Revenue. ....................... 180,000 (10,000 X $18) 12/31/07 Unearned Subscription Revenue. ................................... 75,000 Subscription Revenue. ......................................... 75,000 ($180,000 X 5/12 = $75,000) BRIEF EXERCISE 13-6 (a) Accounts Receivable. .................................................................. 31,800 Sales. ................................................................................. 30,000 Sales Taxes Payable. ........................................................ 1,800 ($30,000 X 6% = $1,800) (b) Cash.
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CHAPTER%2013%20-%20SOLUTIONS%20TO%20EXTRA%20EXERCISES -...

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