Accounting final

The value that a series of equal payments will grow to in the future is referred to as the:

Future value of an annuity.

Outstanding common stock refers to the total number of shares:

Issued less treasury stock.

The current portion of long-term debt is:

The amount that will be paid within one year of the balance sheet date

Sally Supply has a $5 million liability at 12/31/2021, of which $1 million is payable in each of the next five years. Sally Supply records the liability on the balance sheet as..

$1 million current liability and a $4 million long-term liability

Time value of money is the concept that, because of its interest-earning potential:

$1 received today is worth more than $1 to be received in the future

On November 1, 2021, Ben's Bakery signed a $200,000, 3%, six-month note payable with the amount borrowed plus accrued interest due 6 months later. What amount of CASH will be needed to pay back the note payable plus any interest on May 1?

203,000

Bo wants to give a $500,000 gift in 7 years. If money is worth 6% compounded semiannually, what is the gift worth today

330,559

How much will $24,000 invested today grow to in four years, assuming an interest rate of 10% compounded annually?

35,138

How much will $5,000 invested at the end of each year grow to in 6 years, assuming 7% compounding interest?

35,766.

Suppose a soccer coach makes a base salary of $2.4M a year. Employers are required to withhold 6.2% Social Security tax up to a max base amount and a 1.45% medicare tax with no maximum. Assuming the social security max base amount is $128,400, how much will be withheld for coach's medicare and social?

42,761

Spartan School issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000, interest payments made semi-annually. Market rate for type of bond is 7%. what is issue price of bond?

464,469

Spartan School issues a bond due in 10 years with a stated interest rate of 6% and a face value of $500,000, interest payments made semi-annually. Market rate for type of bond is 5%. what is issue price of bond?

538,973

How much must be invested today at 9% interest, compounded annually, to accumulate to $10,000 in five years?

6,499.

Suppose you buy lunch for $8.39 that includes a 5% sales tax. How much did the restaurant charge you for the lunch and how much does restaurant owe in sales tax?

7.99 for lunch and $0.40 for sales tax.

What is the value today of receiving $3,000 at the end of each year for the next 3 years (at 3% compounding interest)?

8,486.

Travel Inc. has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% and unemployment are 3.8% of the employees first $7,000 earned each. What is EMPLOYER'S total payroll tax expense for first week of January?

916

When a company issues 25,000 shares of $1 par value common stock for $10 per share, the journal entry would include

A credit to Common Stock for $25,000

Spartan Corp. had 100,000 outstanding shares of common stock. On June 1, Spartan bought back 20,000 shares of its own stock at $30 per share. On July 3, it sold 10,000 shares at $28 per share. Entry on JULY 3 would include

A credit to Treasury Stock for $300,000

When a company collects sales tax from a customer, how is the transaction recorded by the company?

A debit to Cash and a credit to Sales Tax Payable

Spartan Corp. had 100,000 outstanding shares of common stock. On June 1, Spartan bought back 20,000 shares of its own stock at $30 per share. On July 3, it sold 10,000 shares at $28 per share. Entry on JUNE 1 would include

A debit to Treasury Stock for $600,000

The par value of shares issued is normally recorded in the

Common Stock account.

ABC Co. borrowed $50,000 from S Bank and signed a promissory note payable. What entry should ABC Company record?

Debit Cash, $50,000; Credit Notes Payable, $50,000

In January 2021, Sport Store sells a gift card for $50. In February 2021, the customer spends $20 of the gift card. What is appropriate journal entry in JANUARY?

Debit Cash, $50; credit Deferred Revenue, $50

In January 2021, Sport Store sells a gift card for $50. In February 2021, the customer spends $20 of the gift card. What is appropriate journal entry in FEBRUARY?

Debit Deferred Revenue, $20; credit Sales Revenue, $20

The board of directors of Caps Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On declaration date, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. Assuming dividends were declare on June 1, what is entry on June 30 to record payment of cash dividends?

Debit Dividends Payable; credit Cash, $9,000

The board of directors of Caps Inc. declared a $0.60 per share cash dividend on its $1 par common stock. On declaration date, there were 50,000 shares authorized, 20,000 shares issued, and 5,000 shares held as treasury stock. What is entry when dividends are declared?

Debit Dividends; credit Dividends Payable, $9,000

On November 1, 2021, Ben's Bakery signed a $200,000, 3%, six-month note payable with the amount due 6 months later. What should the bakery record on December 31, 2021?

Debit Interest Expense and credit Interest Payable, $1,000

ABC Co. borrowed $50,000 from S Bank and signed a promissory note payable. What entry should S Bank record?

Debit Notes Receivable, $50,000; Credit Cash, $50,000

At times, businesses require advance payments from customers that will be applied to the purchase price when goods are delivered or purchased. This represents

Liabilities until the product or service is provided

A bond with a face amount of $500,000 bears interest at 7%. The market rate of interest is 6%. The bond will sell for

More than $500,000

The value today of receiving a single lump sum amount in the future is referred to as the:

Present value of a single amount.

The value today of receiving a series of equal payments in the future is referred to as the:

Present value of an annuity.

A bond requires the borrower to repay a stated amount at the maturity date. This stated amount is referred to as the:

Principal or face amount

A $500,000 bond issue sold for $490,000. Therefore, the bonds:

Sold at a discount b/c state interest rate was lower than market rate.

Which of the following is true for bonds issued at a discount about the stated and market interest rates?

The stated interest rate is less than the market interest rate.

Which of the following is a true statement regarding sources of corporate financing

Three primary sources of long-term debt financing are notes, leases & bonds

Spartan Surf sells a surfboard model that carries a one-year warranty. Past experience indicates that 15% of those sold will have defective accessories within a year and that average repair cost is $20 per board. If 1,000 boards were sold this year, the entry to record warranty expense is a DEBIT to

Warranty Expense of $3,000

Current liabilities are payable within ____ year(s) and long-term liabilities are payable in more than ____ year(s)

one, one

Which of the following are not included in an employer's payroll tax expense?

state income taxes

when will a bond be issued at a premium?

stated rate of return is greater than market rate of return