会计英语 第四版 叶建芳07

Lesson 7
Liabilities
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The Nature of Liabilities
Defined as debts or obligations arising from past transactions or
events.
Maturity = 1 year or less
tax returns.
Results in . . .
Usually. . .
Financial statement income tax expense.
Results in . . .
income taxes payable.
The difference between tax expense and tax
An existing condition, situation, or set of circumstances involving uncertainty as to possible asset (contingent asset) or liability (contingent liability) that will ultimately be resolved when one or more future events occur or when such event or events fail to occur.
? Tax rate
30%
30% payable for
Income taxes
$ 45,000 $ 9,000 the period.
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Deferred Income Taxes
Example
The deferred tax for the period of $36,000 is the difference between income tax expense of $45,000 and
Debit
200
Credit
200
$10,000 ´ 12% ´ 2/12 = $200
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Payroll Liabilities
Employers incur several
expenses and liabilities from
having employees.
Porter Company
promises to pay to the order of Security National Bank
the sum of
$10,000.00
with interest at the rate
of 12.0% per annum.
signed John Caldwell
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Unearned Revenue
Cash is sometimes collected from the customer before the revenue is actually earned.
As the earnings process is
completed . . .
Cash is received
title
treasurer
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Notes Payable
On November 1, 1999, Porter Company would make the following entry.
Date
Description
1-Nov Cash
Note Payable
Interest Payable Example
On December 31, Porter Company would record interest payable with the following
entry:
Date
Description
31-Dec Interest Expense
Interest Payable
Revenues Depreciation Expense:
Straight-line Accelerated Other Expenses
$ 1,000,000
200,000 320,000 650,000
X-Off uses straight-line depreciation for financial reporting and accelerated depreciation for
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Payroll Liabilities
Gross Pay
Net Pay
Personal in come Taxes
Housing fund
Unemployment Voluntary Insurance,etc. Deductions
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law.
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Deferred Income Taxes
GAAP is the set of rules for preparing financial statements.
The tax law is the set of rules for preparing
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Deferred Income Taxes Example
Compute X-Off’s income tax expense and income tax payable.
Income
Tax
Revenues Less:
Statement Return Difference
Current Notes Payable
Noncurrent Notes Payable
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Notes Payable
PROMISSORY NOTE
Miami, Fl Location
Nov. 1, 1999 Date
Six months after this date
in advance.
Deferred revenue is recorded.
Earned revenue is recorded.
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Deferred Income Taxes
Corporations pay income
taxes following tax
(120,000) -
Income before taxes $ 150,000 $ 30,000 $ 120,000
? Tax rate Income taxes
30%
30%
30%
$ 45,000 $ 9,000 $ 36,000
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Contingency: Defined
income tax reporting. X-Off’s tax rate is 30%.
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Deferred Income Taxes Example
Compute X-Off’s income tax expense and income tax payable.
Debit
10,000
Credit
10,000
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Interest Payable
Interest expense is the compensation to the lender for giving up the use of money for a period of time.
payable is recorded in an account called
deferred taxes.
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Deferred Income Taxes Example
Examine the December 31, 1998 information for X-Off Inc.
$ 1,000,000 $ 1,000,000 Income taxes based on tax
Depreciation Other expenses Income before taxes $
200,000
320,000
650,000
650,000
150,000 $ 30,000
return income are the taxes
Income
Statement
Revenues Less:
Depreciation Other expenses
$ 1,000,000
200,000 650,000
Income before taxes $ 150,000
? Tax rate Income taxes
30% $ 45,000
Tax
RetTuhrne inDcoifmfeeretnacxe amount computed based on financial statement income is income tax expense for the period.
DEBT
EQUITY
Funds from creditors, with
Funds from
a definite due date, and
owners
sometimes bearing
interest.
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Accounts Payable
Short-term obligations to suppliers for purchases of merchandise and to others for goods and services.
Merchandise Inventory invoices
Office supplies invoices
Shipping charges
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Utility and phone bills
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Notes Payable
When a company borrows money, a note payable is created.
The liability is called interest payable.
To the lender, interest is a revenue.
To the borrower, interest is an expense.
Interest Rate Up!
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Contingent assets
Maturity > 1 year
Current Liabilities
Noncurrent I.O.U. Liabilities
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Distinction Between Debt and Equity
The acquisition of assets is financed from two sources:
income tax payable of $9,000.
Income
Tax
Statement Return Difference
Revenues Less:
Depreciation Other expenses
$ 1,000,000 $ 1,000,000 $
-
200,000 650,000
320,000 650,000
Current Portion of Notes Payable
The portion of a note payable that is due within one year, or one operating cycle, whichever is longer.
Total Notes Payable
8
Interest Payable Example
What entry would Porter Company make on December 31, the fiscal year-end?
Date
Description
Debit
Credit
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