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Unformatted text preview: ACC 120 Notes on Chapter 8,9,10 17/11/2010 20:33:00 Current Liabilities - sacrifice or use of assets ***not going to go into the operating cycle*** require sacrifice or loss of an assets the past event was the purchase of goods and the present obligation is money that is due as a result Liabilities; Current payable within one year Long term - longer than one year Liquidity Ratios Working Capital Current Asset Current Liabilities Current Ratio Current Asset/Current Liabilities 2:1 is good ratio risk is going to focus on results banks dont throw money after unprofitable firms. Notes Payable is important to review interest is calculate one time ***BE 8-1*** p 369 Dr | Cr Nov.1 Cash 3,000,000 Notes Payable 3,000,000 Dec. 31 Interest Expense 30,000 Interest Payable 30,000 6 months means it would be due at the end of April April 30 Notes Payable 3,000,000 Interest Payable 30,000 Interest Expense 60,000 Cash 3,090,000 **p. 371** 8-1) Nov. 1 Cash 50,000 Notes Payable 50,000 Dec. 31 Interest Expense 500 Interest Payable 500 Jan. 31 Notes Payable 50,000 Interest Payable 500 Interest Expense 250 50,750 8-2) Aug 1 Cash 20,000,000 Notes Payable 20,000,000 Dec. 31 Interest Expense 666,667 Interest Payable 666,667 Jan 31 Notes Payable 20,000,000...
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- Spring '11