Chapter F10 Power notes Current Liabilities Learning objectives 1. The Nature of current liabilities 2. Short-Term Notes Payable 3. Contingent Liabilities c10 4. Payroll and Payroll Taxes 5. Accounting Systems for payroll 6. Employees'Fringe Benefits 7. Financial analysis and Interpretation c10-1
C10 - 1 Learning Objectives Power Notes 1. The Nature of Current Liabilities 2. Short-Term Notes Payable 3. Contingent Liabilities 4. Payroll and Payroll Taxes 5. Accounting Systems for Payroll 6. Employees’ Fringe Benefits 7. Financial Analysis and Interpretation Chapter F10 Current Liabilities C10
Chapter F10 Power notes Current Liabilities Slide :f Power Note Topics 3 Short-Term Notes Payable 6. Product Warranty Liability 7 Payroll and payroll Taxes 12. Employees'Earnings 15. Employer's Payroll Taxes 19. Payroll System and Data Flow 26· Quick Ratio k Note: To select a topic, type the slide# and press Enter. c10-2
C10 - 2 • Short-Term Notes Payable • Product Warranty Liability • Payroll and Payroll Taxes • Employees’ Earnings • Employer’s Payroll Taxes • Payroll System and Data Flow • Quick Ratio Slide # Power Note Topics 3 6 7 12 15 19 26 Note: To select a topic, type the slide # and press Enter. Chapter F10 Power Notes Current Liabilities
Short-Term Notes Payable Bowden Co. Buyer/Borrower) Coker Co Seller/Creditor) Description Debit Credit Description Debit Credit Mdse Inventory 10.000 Accts. Receivable 10.000 Accts Payable 10.000 Sales 10.000 Cost of Mdse Sold 7,500 Mdse Inventory 7,500 May 1. Bowden Co purchased merchandise on account from Coker Co., $10,000, terms 2/10, n/30 c10-3
C10 - 3 Short-Term Notes Payable Description Debit Credit Mdse. Inventory 10,000 Accts. Payable 10,000 Accts. Receivable 10,000 Sales 10,000 Cost of Mdse. Sold 7,500 Mdse. Inventory 7,500 Bowden Co. (Buyer/Borrower) Coker Co. (Seller/Creditor) Description Debit Credit May 1. Bowden Co. purchased merchandise on account from Coker Co., $10,000, terms 2/10, n/30
Short-Term Notes Payable Bowden Co. Buyer/Borrower) Coker Co Seller/Creditor) Description Debit Credit Description Debit Credit Mdse Inventory 10.000 Accts. Receivable 10.000 Accts Payable 10.000 Sales 10.000 Cost of Mdse Sold 7.500 Mdse Inventory 7,500 Accts Payable 10.000 Notes Receivable 10.000 Notes Payable 10.000 Accts. Receivable 10.000 May 31. Bowden Co issued a 60-day, 12% note for $10,000 to Coker Co on account. c10-4
C10 - 4 Short-Term Notes Payable Description Debit Credit Mdse. Inventory 10,000 Accts. Payable 10,000 Accts. Payable 10,000 Notes Payable 10,000 Accts. Receivable 10,000 Sales 10,000 Cost of Mdse. Sold 7,500 Mdse. Inventory 7,500 Notes Receivable 10,000 Accts. Receivable 10,000 Bowden Co. (Buyer/Borrower) Coker Co. (Seller/Creditor) Description Debit Credit May 31. Bowden Co. issued a 60-day, 12% note for $10,000 to Coker Co. on account
Short-Term Notes Payable Bowden Co. Buyer/Borrower) Coker Co Seller/Creditor) Description Debit Credit Description Debit Credit Mdse Inventory 10.000 Accts. Receivable 10.000 Accts Payable 10.000 Sales 10.000 Cost of Mdse Sold 7.500 Mdse Inventory 7,500 Accts Payable 10.000 Notes Receivable 10.000 Notes Payable 10.000 Accts. Receivable 10.000 Notes Payable 10.000 Cash 10,200 Interest Expense 200 Interest Revenue 200 Cash 10.200 Notes receivable 10.000 July 30. Bowden Co paid the amount due nterest:$10,000x12%X60/360=$200 c10-5
C10 - 5 Short-Term Notes Payable Description Debit Credit Mdse. Inventory 10,000 Accts. Payable 10,000 Accts. Payable 10,000 Notes Payable 10,000 Notes Payable 10,000 Interest Expense 200 Cash 10,200 Accts. Receivable 10,000 Sales 10,000 Cost of Mdse. Sold 7,500 Mdse. Inventory 7,500 Notes Receivable 10,000 Accts. Receivable 10,000 Cash 10,200 Interest Revenue 200 Notes Receivable 10,000 Bowden Co. (Buyer/Borrower) Coker Co. (Seller/Creditor) Description Debit Credit July 30. Bowden Co. paid the amount due. Interest: $10,000 x 12% x 60 / 360 = $200