FINANCE

Question 23 Unsaved

The Krebhel Company issued $100,000 of 12% bonds on May 1, 2006 at face value. The bonds pay interest semiannually on January 1 and July 1.  The bonds are dated January 1, 2006, and mature on January 1, 2010.  The total interest expense related to these bonds for the year ended December 31, 2006 is

Question 23 options:

$2000
$4000
$8000
$12000

Question 24 (2.5 points)

Question 24 Unsaved

When the market rate of interest was 12%, Patel  Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually.  The selling price of this bond issue was

Question 24 options:

$ 321,970
$1,000,000
$943,494
$621,524

Question 25 (2.5 points)

Question 25 Unsaved

When the market rate of interest was 11%, Shah Corporation issued $100,000, 8%, 10-year bonds that pay interest semiannually.  Using the straight-line method, the amount of discount or premium to be amortized each interest period would be

Question 25 options:

$4000
$896
$17926
$1793

Question 26 (2.5 points)

Question 26 Unsaved

A corporation purchased 1,000 shares of its $5 par common stock at $10 and subsequently sold 500 of the shares at $20.  What is the amount of revenue realized from the sale?

Question 26 options:

$0
$5000
$2500
$10000

Question 27 (2.5 points)

Question 27 Unsaved

The cost of merchandise sold during the year was $50,000.  Merchandise inventories were $12,500 and $10,500 at the beginning and end of the year, respectively.  Accounts payable were $6,000 and $5,000 at the beginning and end of the year, respectively.  Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total

Question 27 options:

$49000
$47000
$51000
$53000

Question 28 (2.5 points)

Question 28 Unsaved

Equipment with an original cost of $50,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000.  As a result of this transaction, cash would

Question 28 options:

increase by $23,000
decrease by $7,000
increase by $43,000
decrease by $30,000

Question 29 (2.5 points)

Question 29 Unsaved

. Littleton Co. can further process Product J to produce Product D.  Product J is currently selling for $21 per pound and costs $15.75 per pound to produce.  Product D would sell for $35 per pound and would require an additional cost of $8.75 per pound to produce.  What is the differential revenue of producing Product D?

Question 29 options:

$7 per pound
$8.75 per pound
$14 per pound
$5.25 per pound

Question 30 (2.5 points)

Question 30 Unsaved

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted.  Which of the following statements is true?

Question 30 options:

Total assets will be understated at the end of the current year.
The balance sheet and income statement will be misstated but the statement of owner’s equity will be correct for the current year.
Net income will be overstated for the current year.
Total liabilities and total assets will be understated.

Question 31 (2.5 points)

Question 31 Unsaved

Which of the statements below indicates that a company earned a net income for the period?

Question 31 options:

The sum of the debits exceeds the sum of the credits in the Balance Sheet columns on the work sheet.
The sum of the credits exceeds the sum of the debits in the Income Statement columns on the work sheet.
The sum of the debits exceeds the sum of the credits in the Income Statement columns on the work sheet.
Cash inflows exceeded cash outflows.

Question 32 (2.5 points)

Question 32 Unsaved

A sales invoice from Norman Geological Services included the following information: merchandise price, $4,000; transportation, $300; terms 1/10, n/eom, FOB shipping point.  Assuming that a credit for merchandise returned of $600 is granted prior to payment, that the transportation is prepaid by the Norman Geological Services, and that the invoice is paid within the discount period, what is the amount of cash received by  Norman Geological Services ?

Question 32 options:

$3,366
$3,400
$3,666
$3,950

Question 33 (2.5 points)

Question 33 Unsaved

Bombay Exporters  sold Maryland ImportersY merchandise on account FOB shipping point, 2/10, net 30, for $10,000. Bombay Exporters  prepaid the $200 shipping charge.  Which of the following entries does Bombay Exporters  make to record this sale?

Question 33 options:

Accounts Receivable- Maryland Importers, debit $10,000; Sales, credit $10,000
Accounts Receivable- Maryland Importers, debit $10,000; Sales, credit $10,000, and

Accounts Receivable- Maryland Importers, debit $200; Cash, credit $200

Accounts Receivable- Maryland Importers , debit $10,400; Sales, credit $10,400
Accounts Receivable- Maryland Importers, debit $10,000; Sales, credit $10,000, and Transportation Out, debit $200; Cash, credit $200

Question 34 (2.5 points)

Question 34 Unsaved

A check drawn by a depositor in payment of a voucher for $725 was recorded in the journal as $257. What entry is required in the depositor’s accounts?

Question 34 options:

debit Accounts Payable; credit Cash
debit Cash; credit Accounts Receivable
debit Cash; credit Accounts Payable
debit Accounts Receivable; credit Cash

Question 35 (2.5 points)

Question 35 Unsaved

Which of the following items that appeared on the bank reconciliation of Shamina Event Planners  did not require an adjusting entry?

Question 35 options:

bank service charges
deposits in transit
NSF Checks
A  check for $520, recorded in the check register for $250.

Question 36 (2.5 points)

Question 36 Unsaved

A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $2,000, would have a cost basis of

Question 36 options:

$92000
$91000
$87000
$86000

Question 37 (2.5 points)

Question 37 Unsaved

Select the most appropriate example of  a capital expenditure below?

Question 37 options:

cleaning the carpet in the front room
tune-up for a company truck
replacing an engine in a company car
replacing all burned-out light bulbs in the factory

Question 38 (2.5 points)

Question 38 Unsaved

Machinery was purchased on January 1, 2005 for $51,000 by Venkat  Manufacturing Group.  The machinery has an estimated life of 5 years and an estimated salvage value of $6,000.  Sum-of-the-years’-digits depreciation for 2006 would be

Question 38 options:

$92000
$91000
$87000
$86000

Question 39 (2.5 points)

Question 39 Unsaved

On the basis of the following data, what is the estimated cost of the merchandise inventory on October 31 by the retail method employed by Lazarus  Fine Silks ?

 

  Cost Retail
Oct. 1      Merchandise Inventory $225,000 $324,500
Oct. 1-31  Purchases (net)  335,000  475,500
Oct. 1-31  Sales (net)    700,000

Question 39 options:

$372000
$140000
$100000
$70000

Question 40 (2.5 points)

Question 40 Unsaved

Maryland Bakers overstates its Merchandise inventory at the end of the year . Which of the following statements correctly states the effect of the error?

Question 40 options:

owner’s equity is overstated
cost of merchandise sold is overstated
gross profit is understated
net income is understated

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