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:
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:
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:
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:
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:
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|
. 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|
|$14 per pound|
|$5.25 per pound|
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:
|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.|
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 Income Statement columns on the work sheet.|
|Cash inflows exceeded cash outflows.|
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:
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, 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|
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|
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|
|A check for $520, recorded in the check register for $250.|
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:
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|
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:
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 ?
|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:
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|