Chapter 10 - 10 Current Liabilities and Payroll Student...

Info icon This preview shows pages 1–12. Sign up to view the full content.

View Full Document Right Arrow Icon
10 Current Liabilities and Payroll Student Version
Image of page 1

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

View Full Document Right Arrow Icon
10-2 Describe and illustrate current liabilities related to accounts payable, current portion of long- term debt, and notes payable. 1 10-2
Image of page 2
10-3 Liabilities that are to be paid out of current assets and are due within a short time, usually within one year, are called current liabilities. Accounts payable Current portion of long-term debt Notes payable 1 Current Liabilities
Image of page 3

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

View Full Document Right Arrow Icon
10-4 Accounts payable arise from purchasing goods or services for use in a company’s operations or for purchasing merchandise for resale. 1 Current Liabilities
Image of page 4
10-5 A firm issues a 90-day, 12% note for $1,000, dated August 1, 2008 to Murray Co. for a $1,000 overdue account. Short-Term Notes Payable 1
Image of page 5

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

View Full Document Right Arrow Icon
10-6 On October 30, when the note matures, the firm pays the $1,000 principal plus $30 interest ($1,000 × 12% × 90/360). 1 Interest Expense appears on the income statement as an “Other Expense.” Short-Term Notes Payable
Image of page 6
10-7 On May 1, Bowden Co. (borrower) purchased merchandise on account from Coker Co. (creditor), $10,000, 2/10, n/30. The merchandise cost Coker Co. $7,500. 1 Short-Term Notes Payable
Image of page 7

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

View Full Document Right Arrow Icon
10-8 Description Debit Credit Bowden Co. (Borrower) Mdse. Inventory 10,000 Accounts Payable 10,000 Coker Co. (Creditor) Description Debit Credit Accounts Receivable 10,000 Sales 10,000 Cost of Mdse. Sold 7,500 Mdse. Inventory 7,500 1
Image of page 8
10-9 On May 31, Bowden Co. issued a 60-day, 12% note for $10,000 to Coker Co. on account. Accounts Payable 10,000 Notes Payable 10,000 Description Debit Credit Bowden Co. (Borrower) Notes Receivable 10,000 Accounts Receivable 10,000 Coker Co. (Creditor) Description Debit Credit 1
Image of page 9

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

View Full Document Right Arrow Icon
10-10 On July 30, Bowden Co. paid Coker Co. the amount due on the note of May 31. Interest: $10,000 × 12% × 60/360. Notes Payable 10,000 Interest Expense 200 Cash 10,200 Description Debit Credit Bowden Co. (Borrower) Cash 10,200 Interest Revenue 200 Notes Receivable 10,000 Coker Co. (Creditor) Description Debit Credit 1
Image of page 10
10-11 On September 19, Iceburg Company issues a $4,000, 90-day, 15% note to First National Bank.
Image of page 11

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

View Full Document Right Arrow Icon
Image of page 12
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern