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Mgmt 200 Assignment Soln 3-26-10

Mgmt 200 Assignment Soln 3-26-10 - Retained...

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Management 200 – Introductory Financial Accounting– Spring 2010 Krannert School of Management - Purdue University Solutions to class assignment for March 26, 2010 Exercise 9-1 Current Liabilities The treatment of the items should be as follows: Taxes payable—Current liability Accounts receivable—Current asset Notes payable, 9%, due in 90 days—Current liability Investment in bonds—Long-term Asset Capital stock—Stockholders' equity Accounts payable—Current liability Estimated warranty payable in 2008—Current liability
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Unformatted text preview: Retained earnings—Stockholders' equity Trademark—Intangible asset Mortgage payable—$10,000 due in 2008 should be Current liability. The remaining portion should be Long-term liability. Problem 9-5 Warranties 1. Warranty Expense 5,400 Estimated Liability for Warranties 5,400 $1,500 X 120 X 3% = $5,400 To record current year's estimated warranty cost. 2. Estimated Liability for Warranties 4,950 Inventory 4,950 To record actual warranty repairs....
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