113. A retail store sells gift certificates that are redeemable in
merchandise. When the gift certificate was sold for cash, a
114. Bake Co.’s trial balance included the following at December 31,
year 1:
115. The deferred income tax liability is not related to an asset for
financial accounting purposes and is expected to reverse in year 2.
What amount should be included in the current liability section of
Bake’s December 31, year 2 balance sheet?
116. In open market transactions, Oak Corp. simultaneously sold its
long-term investment in Maple Corp. bonds and purchased its own
outstanding bonds. The broker remitted the net cash from the two
transactions. Oak’s gain on the purchase of its own bonds exceeded
its loss on the sale of Maple’s bonds. Oak should report the
117. Gar, Inc.’s trial balance reflected the following liability account
balances at December 31, year 1:
118. The deferred income tax liability is based on temporary
differences stemming from different depreciation methods for
financial reporting and income taxes.
In Gar’s December 31, year 1 balance sheet, the current liabilities
total was
119. On July 1, year 1, Cody Company obtained a $2,000,000, 180day bank loan at an annual rate of 12%. The loan agreement requires
Cody to maintain a $400,000 compensating balance in its checking
account at the lending bank. Cody would otherwise maintain a
balance of only $200,000 in this account. The checking account earns
interest at an annual rate of 6%. Based on a 360-day year, the
effective interest rate on the borrowing is