Question

6. Suppose a debt restructuring in which the sum of the future payments to be made by the debtor is greater than the amount owed by the debtor on the restructuring date. Please indicate which of the following statements is correct.

Assertion 1: Debtor will not recognize profit on restructuring and must recalculate the interest rate of the modified debt.

Assertion 2: Regardless of whether the sum of future payments is greater or less than the debt at the date of the restructuring, the creditor will determine the present value of the future payments using the original interest rate.

a. Claim 1 is correct, but not Claim 2
b. Assertion 2 is correct, but not Assertion 1
c. Both statements are correct
d. Neither statement is correct

7. Wilson Company sells truck parts. Elmo Jado visits the store to buy a part for his truck. The part has a sale price of $ 900, but it is not available and Jado gives a deposit of $ 400 for Wilson to order the part. Wilson must make the next wage entry.

a. Cash 400
Sales 400

b. Cash 400
Accounts receivable 500
Sales 900

c. Cash 400
Accounts receivable 500
Unearned revenue 900

d. Cash 400
Unearned revenue - deposit 400

8, Peterson Enterprises sells an item for $ 1,200 and charges a $ 60 SUT. The wage entry you must make is:

a. Cash 1,260
Salts 1,260

b. Cash 1,260
1,200 salts
Sales tax revenue 60

c. Cash 1,260
1,200 salts
Sales tax payable 60

d. Cash 1,260
1,200 salts
Unearned sales tax revenue 60

9. Marin Company ended the fiscal year on August 31, 2020. The company estimates that its income tax liability for the year ended August 31, 2020 will be $ 35,000. The company will file its return and pay the taxes on November 15, 2020. The wage entry on August 31, 2020 will be:
a. None. You will not make a wage entry until November.
b. Debt to tax expense and tax credit payable.
.

10. A corporation declares a cash dividend in the total amount of $ 240,000. The dividend will be paid 60 days after the declaration date. That date belongs to the following fiscal year

a. Retained earnings 240,000
Dividends payable 240,000

b. Dividend expense 240,000
Dividends payable 240,000

c. Retained earnings 240,000
Dividend expense 240,000

d. None. No wage entry is made until dividends are paid.

Answer 1

6. Option C is correct .

Both statement are corrrect.

Because In first assertion again calculation of debt for proper payment is asked.

In second assertion proper restructuring of amount on present time are seek.

so both conditions are true.

7. Option d is correct

Because currently order is placed with advance payment if part not arrange then order may be cancel.

so left of option is incorrect because sale not confirm and income not sured in sale and receivable.

8. Option b is correct.

Because at time of sale tax on sale show as revenue and shows seperate.

In left of entry amount are entered combined that are wrong and in c sales tax payable mentioned it is wrong and in d unearned mention that is wrong because sale is done so it is confirm not unearned.

9. Option a is correct

BECAUSE company pay tax in november so advance payment of tax can't be recorded.

10. Option d is correct.

no wage entry because until the dividend is paid no entry can be recorded.

so left of option are in correct.

at the time of dividend payment

retained earning Dr. And dividend payable cr. Is shown BUT at present no dividend is paid so no wage entry.

Thanks. ...

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