Week 4 Individual Problem Set

1. Georgia Lazenby believes a real financial promise is a debt that throw out be expected to be paid in unity year. Is Georgia correct? Explain. Yes, Georgia Lazenby is current. A current financial obligation can be paid from subsisting current assets or the creation of other current liabilities and hold back to be at heart one year or the operating cycle. 7. (a) What are long- stipulation liabilities? Give two examples. A long-term li world power is a form of current liability. A long-term liability in most cases does non have to endure within a one year term. An example would be a lend with interest. An example of a long-term liability would be that of a sequester and a owe. (b) What is a perplex? Bonds are an obligation repays a principal amount at a hereafter date, but pay interest on an annual basis. 8. seam these types of bonds: (a) Secured and unsecured. Secured bonds have particular assets of the issuer promised as collateral for the bonds. An unsecured bond is given against the general credit of the borrower. (b) interchangeable and call subject. A convertible bond can be converted into common channel and a call able bond can be retired at a utter dollar amount prior to maturity. 19. Valentin Zukovsky says that liquidness and solvency is the same thing. Is he correct? If not, how do they differ? No, Valentin is not correct.

Liquidity is the ability for a company to be able to pay its obligations in one case they have matured and are able to meet upset(prenominal) needs for cash. A Solvency is the ability for a company to c onk out as a whole. BE10-1 Kananga Compa! ny has these obligations at December 31: (a) a note payable for $100,000 imputable in 2 years Yes, this is a long term liability. (b) a 10-year mortgage payable of $200,000 payable in decennium $20,000 annual payments No, this would be considered a liquidity. (c) interest payable of $15,000 on the mortgage No, this would be a current liability. (d) accounts payable of $60,000. Yes, this would be a current liability. For...If you want to get a integral essay, order it on our website: BestEssayCheap.com

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