10 Riley Company borrowed 36000 on April 1 Year 1 from the T

10) Riley Company borrowed $36,000 on April 1, Year 1 from the Titan Bank. The note issued by Riley carried a one year term and a 7% annual interest rate. Riley earned cash revenue of $1,700 in Year 1 and S1,400 in Year 2. Assume no other transactions. The amount of total liabilities that would appear on Riley\'s December 31 balance shees for Year 1 and Year 2, respectively, would be: A) S36,000 and $0. B) $37,890 and $0. C) $37,890 and $38,520. D) $1,890 and $630. 11) Issuing a note payable is a(n): A) claims exchange transaction. B) asset source transaction. C) asset use transaction. D) asset exchange transaction. 12) Which of the following is a claims exchange transaction? A) Accrued interest on a note payable. B) Issued a note to purchase equipment. C) Repaid principal on a note payable. D) Paid interest on a note payable. 13) Selling $130 of merchandise to a customer for $200 cash in a state where the sales tax rate is 4% A) Increases cash flow from operating activities by $208. B) Increases total assets by $78. C) Increases equity by $70. D) All of these answer choices are correct. 14) Which of the following represents the impact of a taxable cash sale of $400 on the accounting equation if the sales tax rate is 5%? Aj An increase to cash for $420, an increase to sales tax expense for $20, and an increase to revenue for $400 B) An increase to cash for $400, an increase to sales tax payable for s20, and an increase to sales revenue for $380. C) An increase to cash for $420, an increase to sales tax payable for $20, and an increase to sales revenue for $400 D) None of these answer choices is correct. sales 15) Monthly remittance of sales tax: A) Reduces liabilities. B) Is a claims exchange transaction. C) Reduces stockholders\' equity D) All of these answer choices are correct. Copyright C2018 McGraw-Hill

Solution

As per policy only first four questions will be answered

10. Answer is option C

$37,890 and $38,520

Year 1= 36000 +(36000*7%*9/12)

Year 2= 36000+1890+(36000*7%*3/12)

11. Answer is option B

asset source transaction

12. Answer is option A

Accrued interest on notes payable

(a liability increase)

13. Answer is option D

(cash received from customer = 200 +(200+4%) +208

Retained earnings of 200-130 =70 will increase equity.

Total assets will increase 208-130=78