Solutions for Horngren's Accounting, Volume 2, 12th Canadian Edition Miller-Nobles (All Chapters included)
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Course
ACCT
Institution
ACCT
Complete Solutions Manual for Horngren's Accounting, Volume 2, 12th Canadian Edition by Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Grant Mowbray, Jo-Ann L. Johnston ; ISBN13: 9780136852872. (Full Chapters included Chapter 11 to 18). group projects solutions....
Questions
1. A current liability is one that is payable within the coming year or within the
company’s normal operating cycle if longer than a year. All other liabilities
are long term.
2. Retailers act as collecting agents for the federal government. Stores charge
their customers GST, but the GST belongs to the federal government. The
store has a liability to pay the federal government (Receiver General) the
amount of tax collected less applicable input tax credits.
3. GST Recoverable or Input Tax Credit
4. The company reports current liabilities for the short-term note payable of
$50,000 and for interest payable of $1,000 ($50,000 × 0.04 × 6/12).
5. The balance sheet would show a current liability of $1,000 in an account
called Current Portion of Long-Term Note Payable. The long-term liabilities
section would report $4,000 as the balance of the Note Payable.
6. If current were not separated from long-term debt, two ratios would be
distorted—the current ratio and the acid-test ratio. The understated current
liability would make both of the results more positive than they are in
reality, and users of the financial information would be misled.
7. An accrued expense is an expense that has been incurred but has not been
paid. Because the expense has been incurred but not paid, it must be
accrued, thus it is a liability.
8. Accounts payable and short-term notes payable are both current liabilities—
that is, both are due and payable within one year or within the company’s
operating cycle.
Differences:
• Accounts payable are amounts owed for products or services that are
purchased on open account.
• Accounts payable have no interest obligation (however, if paid late,
interest or late payment charges could be incurred); short-term notes
payable have a defined rate of interest due over the term of the note.
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