201Lec10 - 201Lec10.PPT LIABILITIES Claims on total assets...

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201Lec10.PPT Claims on total assets - obligations to employees (current and retired), governments, suppliers, banks and financiers, law suit settlements, customers, etc “Current” if due within 1 year 1 LIABILITIES LIABILITIES
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NOTES PAYABLE NOTES PAYABLE NOTES PAYABLE NOTES PAYABLE Similar calculations to notes receivable. Record principle. Interest only as incurred Sometimes, notes are paid off over several years. If so, balance shows split as follows: Current Liabilities: Current Maturity of Long-Term Debt $ xxxxx Long-term Liabilities: Long-term Debt $ xxxxx 2
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Also called Installment notes. - Make periodic payments over the life of note. Installment payment schedule MORTGAGE NOTES PAYABLE MORTGAGE NOTES PAYABLE MORTGAGE NOTES PAYABLE MORTGAGE NOTES PAYABLE 3
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EXAMPLE : On January 1, 2011 Konk borrowed $20,000 at an annual interest rate of 10%. The loan requires 6 annual payments of $4,592.15. Prepare an installment payment schedule. Payment Amount Interest ** Principal Balance (Balance)( 10% ) (Amount-Interest) 4 ** Use 5% if semi-annual payments, use 2.5% if quarterly payments! 1-1-11 20000.00 1-1-12 4592.15 2000.00 2592.15 17407.85 1-1-13 4592.15 1740.78 2851.37 14556.48 1-1-14 4592.15 1455.65 3136.50 11419.98 1-1-15 4592.15 1142.00 3450.15 7969.83 1-1-16 4592.15 796.98 3795.17 4174.66 1-1-17 4592.12 417.46 4174.66 0 Balance sheet at 12/31/11 Current liabilities : Interest payable (recorded by AJE on 12/31/10) >>>>>> $ 2,000.00 Current portion of long-term debt 2,592.15 Long term liabilities : – Notes payable $17,407.85 Balance sheet at 12/31/11 Current liabilities : Interest payable (recorded by AJE on 12/31/10) >>>>>> $ 2,000.00 Current portion of long-term debt 2,592.15 Long term liabilities : – Notes payable $17,407.85
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Assessed on buyer but collected by seller. - Seller is liable for determining when sales tax applies and how much to charge. - Required for sales to an in-state buyer. Once collected, sales tax payable is a liability of seller. If seller isn’t liable, states assess a “use” tax payable by the buyer. Current liabilities - SALES TAX PAYABLE Current liabilities - SALES TAX PAYABLE Current liabilities - SALES TAX PAYABLE Current liabilities - SALES TAX PAYABLE 5
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EMPLOYEE’S TAXES WITHHELD: FICA is made up of two components: - Social Security (up to a maximum) - Medicare (on unlimited wages) Both are a percentage of gross wages Federal income tax FIT - Based on filing status State income tax SIT urrent Liabilities - PAYROLL PAYABLES urrent Liabilities - PAYROLL PAYABLES urrent Liabilities - PAYROLL PAYABLES urrent Liabilities - PAYROLL PAYABLES 6
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This note was uploaded on 03/08/2012 for the course BUS ADM 201 taught by Professor Konkel during the Spring '08 term at Wisconsin Milwaukee.

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201Lec10 - 201Lec10.PPT LIABILITIES Claims on total assets...

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