HOMEWORK ACG2011 WEEK 2 FEB 2012 CHAPTERS 11-13

HOMEWORK ACG2011 WEEK 2 FEB 2012 CHAPTERS 11-13 - HOMEWORK...

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HOMEWORK FOR ACG2011 WEEK 2 FEB 2012 DUE MONDAY FEB 20 2012 PLEASE BRING A HARDCOPY OF YOUR WORK TO HAND IN AT CLASS. DO ALL QUESTIONS IN CHAPTER 11 (7 QUESTIONS), AND ANY 2 FROM CHAPTER 12 AND 2 FROM CHAPTER 13 FOR A TOTAL OF ELEVEN QUESTIONS. ANSWERS MUST BE NEATLY TYPED IN WORD OR EXCEL WITH YOUR NAME AND DATE AT THE TOP. Chapter 11: Current Liabilities and Payroll Accounting 1. A company's income before interest expense and income taxes in 2010 and 2011 is $225,000 and $200,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk. 2. BMart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million. DMart had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million. Calculate the times interest earned for each company and comment on the results. 3. On November 1, Ken’s Skateboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable. a. What amount of interest expense on this note should Ken’s Skateboards report on year-end December 31? b. Prepare Ken’s journal entry to record the issuance of the note payable. c. Prepare Ken’s journal entry to record the payment of the note on February 1 of the following year. 4. On December 1, Katie’s Company borrowed $45,000 cash from LastBank by signing a 90-day, 9% note payable. a. Prepare Katie’s journal entry to record the issuance of the note payable. b. Prepare Katie’s journal entry to record the accrued interest due at December 31. c. Prepare Katie’s journal entry to record the payment of the note on March 1 of the next year.
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HOMEWORK ACG2011 WEEK 2 FEB 2012 CHAPTERS 11-13 - HOMEWORK...

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