Chapter 13 Accounting and Reporting of Current and Contingent Liabilities

Chapter 13 Accounting and Reporting of Current and Contingent Liabilities

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Unformatted text preview: Chapter 13 Accounting and Reporting of Current and Contingent Liabilities Brief Exercise 13-1: July 1: Purchase 60000 Account Payable 60000 Freight in 1200 Cash 1200 July 3: Account Payable 6000 Purchase return 6000 July 10: Account Payable 54000 Purchase Discount 1080 Cash 52920 13-2: 11/1/10 Cash 40000 Note payable 40000 12/31/10 Interest Expense 600 Interest payable 600 2/1/11 Note payable 40000 Interest payable 600 Interest expense 300 Cash 40900 13-3: 11/1/10 Cash 60000 Discount on N/P 1350 N/P 61350 12/31/10: interest expense 900 Discount on N/P 900 2/1/11 interest Expense 450 Discount on N/P 450 N/P 61350 Cash 61350 13-4 (a)Since both intent and ability are meet the requirement, none of the $500000 would be reported as current liability. It would be a long term liability (b)Because repayment of the N/P required the use of existed current asset, the entire $500000 would be reported as current liability. 13-5: 8/1/10: Cash 216000 Unearned subscription revenue 216000 12/31/10: unearned reveune 90000 Subscription revenue 90000 13-6: (a) Cash 31800 Sales 30000 Sales taxes payable 1800 (b ) A/R 20670 Sales 19500 Sales taxes payable 1800 13-7 Wage Expense 24000 FICA Taxes payable 1836 Federal Withholding Taxes payable 2990 Stated Withholding taxes payable 920 Insurance premium Payable 250 Cash 18004 13-8 Wage Expense 30000 Vacation Wage Payable 30000 13-9 12/31/10 Bonus Expense 350000 Bonus Payable 350000 2/15/11 bonus payable 350000 Cash 350000 13-10 (a) Lawsuit loss 900000 Lawsuit Liability 900000 (b) No entry is necessary, the loss is not accrued....
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This note was uploaded on 11/14/2011 for the course ACCT 40970 taught by Professor Geaniew.margavio during the Spring '10 term at Missouri State University-Springfield.

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Chapter 13 Accounting and Reporting of Current and Contingent Liabilities

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