Question

11. A company withholds $ 15,000 from its employees for social security and its employer contribution is also $ 15,000. The company must recognize:
Debt Expense
a. $ 15,000. $ 15,000
b. $ 15,000 $ 30,000
c. $ 30,000   $ 15,000
d. $ 30,000 $ 30,000

12. A company will recognize expenses for vacations of its employees:
a. In the period in which employees earn the right to vacation
b. In the period when employees enjoy vacations
c. Only if accrued vacations are to be paid in cash
d. Only when employees retire or are laid off

13. Employees of a company are entitled (each) to 15 days of sick leave annually. The company is required to recognize the expense for this leave in each period that employees earn this right.
a. TRUE b. FALSE

14. At the close of the fiscal year, a company has a debt that expires in the short term. However, the company intends to refinance it for the long term. The company will present this debt:
a. Like a current debt because it expires in the short term
b. As a long-term debt because you intend to refinance it
c. As a long-term debt if, in addition to the intention, you have already refinanced it or have a contract to refinance it.
d. When they discussed this issue I fell asleep and did not pay attention.

15. A business borrowed $ 500,000 on December 31, 2019. The business will repay the loan in five annual payments, beginning December 31, 2020. The interest rate is 12%. The amortization table is as follows:

How is this debt presented in the balance sheet of December 31, 2020?
a. Short-term debt of $ 88,149 and long-term debt of $ 333,146
b. Short-term debt of $ 138,704 and long-term debt of $ 282,591
c. Long-term debt of $ 421,295
d. Short-term debt of $ 50,555 and long-term debt of $ 421,295

Answer 1

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11. A company withholds $ 15,000 from its employees for social security and its employer contribution is also $ 15,000. The company must recognize:

Debt, Expense: Option a. $ 15,000. $ 15,000.

12. A company will recognize expenses for vacations of its employees:

a. In the period in which employees earn the right to vacation.

13. Employees of a company are entitled (each) to 15 days of sick leave annually. The company is required to recognize the expense for this leave in each period that employees earn this right.

a. TRUE .

14. At the close of the fiscal year, a company has a debt that expires in the short term. However, the company intends to refinance it for the long term. The company will present this debt:

c. As a long-term debt if, in addition to the intention, you have already refinanced it or have a contract to refinance it.

15. A business borrowed $ 500,000 on December 31, 2019. The business will repay the loan in five annual payments, beginning December 31, 2020. The interest rate is 12%. The amortization table is as follows:

PMT= Annual payments	PV*i
	1-(1+i)^-n
IF rate 12%
PMT=	Annual payment= ?
PV=	Loan amount= $ 500,000.
n=	no. of payments= 5
i	12%= 0.12
PMT	500000*0.12
	1-(1+0.12)^-5
PMT	60000
	1-(1.12)^-5
PMT	60000
	1-0.567426855718599
PMT	60000
	0.432573144
Yearly payments	138,704.00
1st payment	138,704.00

So answer is option b. Short-term debt of $ 138,704 and long-term debt of $ 282,591.