51) A company has days' payable outstanding of 70 days. If credit terms of purchases are 2/10, net 30, is the company paying accounts payable on a timely basis?
A) Yes, days' payable outstanding exceeds the net period of 30 days.
B) Yes, days' payable outstanding exceeds the discount period of 10 days and the net period of 30 days.
C) No, days' payable outstanding exceeds the discount period of 10 days and the net period of 30 days.
D) There is not enough information to make an assessment.
52) At January 1, 2015, the Estimated Warranty Payable is $1,000. During 2015, the company recorded Warranty Expense of $17,500. During 2015, the company replaced defective products in accordance with product warranties at a cost of $10,000. What is the Estimated Warranty Payable at December 31, 2015?
A) $7,500
B) $8,500
C) $9,000
D) $17,500
53) On December 1, 2014, Goliath Corporation borrowed $120,000 on a 120-day, 10% note. Goliath Corporation's year end is December 31.
Required:
1. Prepare the journal entries in 2014 and 2015 for Goliath Corporation. Round all numbers to the nearest dollar. Omit explanations.
2. At December 31, 2014, what is reported on the balance sheet for the note?
54) Davies Accessories Company entered into the following transactions relating to notes payable:
August 1Purchased inventory costing $42,000 by signing an 8-month, 5% note payable.
October 1Purchased inventory costing $15,000 by signing a 1-year, 6% note payable.
Required:
Prepare journal entries to record the above transactions. Also, prepare journal entries needed on December 31, the company's fiscal year end. Omit explanations.