115. A classified balance sheet is one that distinguishes between operating and non-operating assets.
116. A classified balance sheet is necessary for calculating a company's current ratio.
117. The current ratio is a measure of a company's solvency.
118. A company with a high current ratio should be concerned that it is not maximizing its earnings potential.
119. The current ratio is calculated, total current assets divided by total stockholders' equity.
120. On October 1, 2011, Harper Company borrowed money by issuing a $10,000 face value discount note to its bank. The note had an 8% interest rate and had a term of 1 year. The amount of cash that Harper received on that date was $10,000.
121. On October 1, 2011, Harper Company borrowed money by issuing a $10,000 face value discount note to its bank. The note had an 8% interest rate and had a term of 1 year. On December 31, 2011, Harper should accrue interest expense in the amount of $200.
122. On October 1, 2011, Harper Company borrowed money by issuing a $10,000 face value discount note to its bank. The note had an 8% interest rate and had a term of 1 year. On that date, Harper recorded a Discount on Notes Payable in the amount of $800.