1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
MrRissso [65]
3 years ago
11

The Tony Hawk Skate Park has a 5-year installment loan with monthly payments of $5,000 including interest. Currently, the first

twelve monthly payments have been recorded as a current liability. The VP of Finance, tells board members that he plans to classify the current portion of the installment note as long-term. He explains that lenders will be more willing to let the company borrow and will offer lower interest rate if the company reports fewer current liabilities.Multiple Choice
a. Classifying the first twelve installment payments as a current liability is not required by GAAP.
b. Reporting the current portion of a long-term note as long-term debt is a misrepresentation of the financial position of the company.
c. The ability to borrow at lower interest rates is more important than being ethical.
d. Presenting investors with a strong current ratio is acceptable at any cost.
Business
2 answers:
tensa zangetsu [6.8K]3 years ago
8 0

Answer: b. Reporting the current portion of a long-term note as long-term debt is a misrepresentation of the financial position of the company.

Explanation:

According to US GAAP, the current portion of a long term liability (the portion that is to be paid in the current period) should be recorded as a Current Liability.

The Current portion of a long term liability thus shows us the amount is the current Liability that a company is due to pay in the current operating cycle.

To therefore put that amount that the company is supposed to pay in the current cycle as a long term liability is a misrepresentation of the books aimed at primarily deceiving lenders as the text shows.

77julia77 [94]3 years ago
4 0

Answer:

b. Reporting the current portion of a long-term note as long-term debt is a misrepresentation of the financial position of the company.

Explanation:

The present portion of Long term liability connotes the total sum of money that will be repayable by the company within its operating cycle. That is if the operating cycle is not specific, we consider the same as 12 months. as a result the present portion will have to represent the amount repayable within 12 months.

As per GAAP present portion of long term liability should be shown as a present liability in view of the fact that it is paid within 12 months.

Therefore the presentation of the current portion as long term debt is a misrepresentation of the financial position of the company.

Hence correct option is Option-b

You might be interested in
In a Cournot market with two firms, the inverse market demand curve is P = 20 – 0.5Q, where Q = q1 + q2. (Firm 1's output = q1;
Ksenya-84 [330]

Answer:

MR = 10 – 1q1.

Explanation:

Demand function, P = 20 – 0.5Q

Q = q1 + q2

Now insert Q in the P = 20 – 0.5Q.

P = 20 – 0.5 (q1 + q2)

We have the value of q2 = 20.

P = 20 – 0.5 (q1 + q2)

P = 20 – 0.5 (q1 + 20)

P = 20 – 0.5q1 – 10

P = 10 – 0.5q1

Total revenue of firm 1, TR = Pq1

TR = 10q1 – (0.5q1)^2

Now MR is the differentiation of TR. So the MR after differentiation if TR of firm 1 is:

MR = 10 – 1q1

4 0
3 years ago
Financial statements that give effect to a subsequent event as though the event had occurred at the balance sheet date are known
mojhsa [17]

Answer:

The correct answer to the following question is Pro forma financial statements.

Explanation:

A subsequent event can be defined as an event which takes place after the reporting period, but before the financial statements of a company are issued.  And depending on what kind of event they are like additional information or new events, it will be decided whether these events should be disclosed in a company's financial statement or not.

If it is decided that the subsequent event should be disclosed in the company's financial statement then a pro forma financial statement would be made, in which nature and financial effect of the subsequent event should be disclosed.

4 0
3 years ago
The following information was obtained from MCB​ Manufacturing, Inc.:Advertising Costs $9,900Indirect Labor 53,000CEO's Salary 6
Eddi Din [679]

Answer:

The MCB Manufacturing's total product costs is $170,560

Explanation:

The computation of the total product cost is shown below:

Total product cost = Indirect Labor + Direct Labor + Indirect Materials Used + Direct Materials Used  + Factory Utilities + Factory Janitorial Costs + Manufacturing Equipment Depreciation

= $53,000 + $40,000 + $7,500 + $65,000 + $760 + $1,200 + $3,100

= $170,560

Thus, the product cost is that cost which includes all types of direct and the indirect costs which are used to ready the product.

8 0
3 years ago
You sold short JCP stock at $80 per share. Your losses could be minimized by placing a __________. a. limit-sell order b. limit-
san4es73 [151]

Answer:

The correct answer is letter "D": stop-buy order.

Explanation:

A stop-buy order is an order to purchase a stock at a particular price above its current market price. By placing a stop-buy order, the investor sets the price at which he will buy the stock in advance, thus eliminating the risk of missing the price point, the opportunity to buy a stock with good returns, or covering a short position at a reasonable loss instead of allowing the negative trade balance to rise.

So, <em>setting a stop-buy order will help the trader exit the transaction at a specific price to cover losses of a short position at a reasonable risk rate.</em>

3 0
3 years ago
What is a renewal date
Allushta [10]
Full Definition<span> of </span>renewal<span>.
 1 : the act or process of </span>renewing<span> : repetition.
 2 : the quality or state of being </span>renewed<span>.
Hope that this helps you! =)</span>
8 0
2 years ago
Read 2 more answers
Other questions:
  • The following stock transactions were completed by the executive vice president of Vinco, Inc., a publicly traded corporation: J
    6·1 answer
  • Frances had a wonderful product, but her salesforce frequently argued over sales tactics and territories. Conflicts arose over i
    11·1 answer
  • Describe a specific situation in which you would use the Combine Documents feature in Word.
    15·1 answer
  • A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is Select one
    12·1 answer
  • Tom’s T.V.’s sold one of their premium products, a new 60" flat screen 3D T.V. to a customer who paid $2,000 in cash. How would
    13·1 answer
  • Barney decides to quit his job as a corporate accountant, which pays $10,000 a month, and goes into business for himself as a ce
    10·1 answer
  • A firm is expected to generate earnings of $2.22 per share next year. The mean ratio of share price to expected earnings of comp
    6·1 answer
  • You deposit $1,100 at the end of each year into an account paying 9.1 percent interest.
    7·1 answer
  • The percentage of decrease in the average price of the economy’s goods and services is known as the __________.
    8·1 answer
  • Chin purchases five protein bars at a price of $3 each. The marginal benefit he receives from each bar is $5 for the first bar,
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!