Chapter 9 Textbook Questions Solutions

Chapter 9 Textbook Questions Solutions - Chapter 9 Review...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 9 Review Questions 9.17 a) The note has a nine-month maturity; therefore the entire amount of the principal, $100,000, should be presented as a current liability. The company should also accrue interest expense for the four month period of $3,000. ($100,000 x 9% x 4/12). This amount would be presented as interest payable in the current liabilities section of the balance sheet. b) The company should record a warranty liability of $15,000 (10,000 x 3% x $50). If the $6,500 which was spent during the year related to the current years sales, then this amount would be deducted from the liability which was set up. The balance at the end of the year would be $8,500. c) 1. When the tickets are sold, all the revenue should be deferred, since the team still has an obligation to play the game. 2. At the end of 2008, the team has yet to play 12 out of 20 games, (60%) therefore 60% of the revenues received for the tickets would be classified as unearned revenue on the balance sheet - $ 4,800. ($400 x 20 x 60%)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/25/2010 for the course FMGT FMGT 2293 taught by Professor Hamere. during the Summer '09 term at Langara.

Page1 / 4

Chapter 9 Textbook Questions Solutions - Chapter 9 Review...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online