Homework
Semester 1- 2021/2022
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Intermediate Accounting 2
(BCAC 421)
Ministry of High Education
Jeddah University
College Of Business (COB)
Department of Accounting
Student Name :
ID :
CLO 1.1
1- What are Typical Current Liabilities ?
1) Accounts payable.
2) Notes payable.
3) Dividends payable.
4) Unearned revenues.
5) Sales taxes payable.
6) Income taxes payable.
7) Employee-related liabilities.
2- What are the elements of determining the selling price of the issued bonds ?
1) supply and demand of buyers and sellers
2) relative risk
3) market conditions
4) state of the economy
3- True / False :
3
Notes Payable classified as short-term or long-term and may be interest- True
bearing or zero-interest-bearing
5
Liabilities are Probable Future Sacrifices of Economic Benefits arising from
present obligations of a particular entity to transfer assets or provide services
to other entities in the future as a result of past transactions or events .
11
Retailers must collect sales taxes from Suppliers on transfers of tangible False
personal property and on certain services and then remit to the proper
governmental authority
12
Current liabilities are obligations whose liquidation is reasonably expected to False
require use of existing resources properly classified as current assets, or the
creation of Long term liabilities .
-1-
True
Additional Questions
Prepare journal entries for the selected transactions
First : The following are selected 2012 transactions of Darby Corporation.
Aug.1- Purchased inventory from Orion Company on account for $150,000. Darby
records purchases gross and uses a periodic inventory system.
Sep. 1-Issued a $150,000, 12-month, 9% note to Orion in payment of account.
Date
1/8
Accounts
Purchases
Debit
150,000
Accounts payable
1/9
Accounts payable
150,000
150,000
Notes payable
31/12
Credit
Interest expense
150,000
4500
Interest payable
4500
Interest calculation = (150,000 x 9 % x 4/12) =
3000
Second : Sports Pro Magazine sold 6,000 annual subscriptions on July 1, 2012, for $ 9
each.
Date
1/7
Accounts
Cash
Debit
Credit
54,000
Unearned revenue
54,000
(6,000 x $9)
31/12
Unearned revenue
27,000
Subscription revenue
($54,000 x 6/12 = $27,000)
-2-
27,000