EXAM_2_SOLUTION

EXAM_2_SOLUTION - SPRING 2010 ACCT 301 EXAM 2 SOLUTION Q1 A...

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SPRING 2010 ACCT 301 EXAM 2 SOLUTION Q1 A A CURRENT LIABILITY IS ONE THAT'S EXPECTED TO REQUIRE THE USE OF CURRENT ASSETS OR THE CREATION OF NEW CURRENT LIABILITES B A LOSS CONTINGENCY IS A POSSIBLE DECREASE IN ASSETS OR INC IN LIABILITIES FOR WHICH THERE IS UNCERTAINTY AND IS CONTINGENT UPON THE OCCURRENCE OR NON-OCCURRENCE OF A FUTURE TRANSACTION OR EVE C A LOSS CONTINGENCY THAT IS PROBABLE (LIKELY TO OCCUR) AND REASONABLY ESTIMABLE IS ACCRUED. A LOSS CONTINGENCY THAT IS PROBABL AND NOT REASONABLY ESTIMABLE OR AT LEAST REASONABLY POSSIBLE (LESS PROBABLE BUT GREATER THAN REMOTE) IS DISCLOSED IN A FOOTNOTE. LOSS CONTINGENCIES THAT ARE REMOTE CAN GENERALLY BE IGNORED. Q2 $100,000 0.75 $74,620 $4,000 5.08 $20,303 PRESENT VALUE $94,923 A LONG TERM NOTE RECEIVABLE $100,000 SALES REVENUE $94,923 DISCOUNT ON NOTE RECEIVABLE $5,077 B INTEREST RECEIVABLE $1,333 DISCOUNT ON NOTE RECEIVABLE $249 INTEREST REVENUE $1,582 INTEREST RECEIVABLE $4000 *2/6= $1,333 INTEREST REVENUE $94,923 *10%*2/12 $1,582
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This note was uploaded on 09/20/2011 for the course ACCT 301 taught by Professor Staff during the Spring '11 term at S.F. State.

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EXAM_2_SOLUTION - SPRING 2010 ACCT 301 EXAM 2 SOLUTION Q1 A...

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