Financial accounting hw

I have provided the anwser sheet and questions in the two attachments

9-11

Compute the times interest earned for weltin company, which reports income before interest expense and income taxes of 2,044,000 and interest expense of 350,000. Interpret its time interest earned (assume that its competitors average a times interest earned 4.0)

9-1A

9-2A

BTN 9-3

Chapter 9

Reporting and Analyzing

Current Liabilities

Quick Study 9-11 (10 minutes)

Times interest earned =

=


Interpretation
:

PROBLEM SET A

Problem 9-1A (45 minutes)

Frier

Com. Bank

UMB

1.

Maturity dates

Date of the note

Term of the note (in days)

Maturity date

2.

Interest due at maturity

Principal of the note

Annual interest rate

Fraction of year

Interest expense

3.

Accrued interest on UMB note at the end of 2010

Total interest for note

Fraction of term in 2010

Accrued interest expense

4.

Interest on UMB note in 2011

Total interest for note

Fraction of term in 2011

Interest expense in 2011

5.

2010 You can show your calculations in your journal entry descriptions.

The terms regarding the notes payable should be in the descriptions as well

Apr. 20

Merchandise Inventory

Accounts Payable—Frier

May 19

Accounts Payable—Frier

Cash

Notes Payable—Frier

.

July 8

Cash

Notes Payable—Community

Cash

Aug. 17

Interest Expense

Notes Payable—Frier

Interest Expense

Cash

Nov. 5

Notes Payable—Community

Cash

28

Notes Payable—UMB Bank

Interest Expense

Dec. 31

Interest Payable

2011

Interest Expense

Jan. 27

126

Notes Payable—UMB Bank

Interest Payable

Cash

Problem 9-2A (40 minutes) You can show your calculations in your journal entry descriptions.

1.

2010

Cash

Nov. 11

Sales

11

Cost of Goods Sold

Merchandise Inventory

30

Warranty Expense

Estimated Warranty Liability

Merchandise Inventory

Dec. 9

Estimated Warranty Liability

Cash

Sales

16

16

Cost of Goods Sold

Merchandise Inventory

Estimated Warranty Liability

Merchandise Inventory

29

Warranty Expense

Estimated Warranty Liability

31

Cash

Sales

Jan. 5

Merchandise Inventory

5

Cost of Goods Sold

2011

Estimated Warranty Liability

Merchandise Inventory

17

31

Warranty Expense

Estimated Warranty Liability

2.
Warranty expense for November 2010 and December 2010

Warranty Expense

Sales

Percent

November

December

Total

3.
Warranty expense for January 2011

Sales in January

Warranty percent

Warranty expense

4.
Balance of the estimated liability as of December 31, 2010

credit

credit

Warranty expense for November

credit

Warranty expense for December

Cost of replacing items in December

debit

Estimated Warranty Liability balance


*Can be viewed as $270 + $540

5.
Balance of the estimated liability as of January 31, 2011

credit

credit

debit

Estimated Warranty Liability balance

Beginning balance

Warranty expense for January

Cost of replacing items in January

Credit

Ethics Challenge — BTN 9-3

1

2.


©McGraw-Hill Companies, 2013


472


Financial Accounting, 6th Edition

©McGraw-Hill Companies, 2013


471


Solutions Manual, Chapter 9

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