At December 31, 2010, Burr Corporation owes $500,000 on a note payable due February 15, 2011.
(If answer is zero,
please enter 0, do not leave any fields blank.)
If Burr refinances the obligation by issuing a long-term note on February 14 and using the proceeds to pay off the note
due February 15, how much of the $500,000 should be reported as a current liability at December 31, 2010?
If Burr pays off the note on February 15, 2011, and then borrows $1,000,000 on a long-term basis on March 1, how
much of the $500,000 should be reported as a current liability at December 31, 2010?
Lexington Corporation's weekly payroll of $24,000 included FICA taxes withheld of $1,836, federal taxes withheld of $2,990,
state taxes withheld of $920, and insurance premiums withheld of $250. Prepare the journal entry to record Lexington's
(For multiple debit/credit entries, list amounts from largest to smallest, e.g. 10, 8, 6.)
Scorcese Inc. is involved in a lawsuit at December 31, 2010.
(If no entry is required, enter No entry as the description
and zero for the amount.)
Prepare the December 31 entry assuming it is probable that Scorcese will be liable for $900,000 as a result of this suit.
Prepare the December 31 entry, if any, assuming it is not probable that Scorcese will be liable for any payment as a result of this suit
Presented below are three independent situations. Answer the question at the end of each situation.
During 2010, Maverick Inc. became involved in a tax dispute with the IRS. Maverick's attorneys have indicated that
they believe it is probable that Maverick will lose this dispute. They also believe that Maverick will have to pay the
IRS between $800,000 and $1,400,000. After the 2010 financial statements were issued, the case was settled with
the IRS for $1,200,000. What amount, if any, should be reported as a liability for this contingency as of December