Exam 7: Accounting for Liabilities

On June 1,2011,Par for the Course,Inc.purchased building and land for $1,000,000 by signing a an $800,000,10-year,12% mortgage and paying the remainder in cash.Payments are to be made at the beginning of each month.Fill in the correct dollar amount AND in the appropriate box to indicate the financial statement where the amount will be found.

(Essay)

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(80)

Question 41

Brooke's Bike Company sold 225 mountain bikes in October.The future estimated warranty cost for the bikes is $25 per bike.The warranty period is one year.The amount of warranty expense for October is $468.75

(True/False)

4.9/5

(91)

Question 42

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.Nadir uses the effective interest method of amortization.With each annual interest payment the unamortized _ will grow _.

(Multiple Choice)

5.0/5

(90)

Question 43

On October 31,2011,Bondable,Inc.issued $20,000 of 10-year,6% bonds at 100.The bonds pay interest annually on October 31.How much cash will the company pay for interest on October 31,2012,the first interest payment date?

(Multiple Choice)

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(77)

Question 44

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.On its balance sheet at December 31,2011,Nadir will show bonds payable of $1,000,000 ________.

(Multiple Choice)

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Question 45

The debt-to-equity ratio ________.

(Multiple Choice)

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Question 46

When a bond sells for par value,its stated interest rate is ________.

(Multiple Choice)

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Question 47

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.How much cash did Nadir receive when the bonds were sold?

(Multiple Choice)

4.9/5

(77)

Question 48

On July 1,2011,Ace Electronics issued $10 million dollars of 8%,20-year bonds at 102.The bonds pay interest semiannually on December 31 and June 30.How much cash will Ace pay when the bonds mature? Assume that the final interest payment is made separately.

(Multiple Choice)

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(87)

Question 49

Buzz Corporation issued $50,000 worth of 10-year,8% bonds for $48,359.66.The $50,000 is called the ________.

(Multiple Choice)

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Question 50

On January 1,2011,Alpha Company issued $1,000,000 of 5%,20-year bonds to buy a new computerized accounting system.The market rate of interest was 6%.The bonds pay interest annually on December 31.On its balance sheet at December 31,2011,Alpha will show bonds payable of $1,000,000 ________.

(Multiple Choice)

4.7/5

(77)

Question 51

On January 1,2011,Ace Electronics borrowed $40,000 on a five-year,7% note.Ace will pay $\bold{\text{only the interest}}$ on the loan on December 31 each year.The entire principal will be repaid on December 31,2015,the last interest payment date.On its statement of cash flows for the year ended December 31,2011,Ace will show cash paid for interest as ________ activity.

(Multiple Choice)

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Question 52

Definitely determinable liabilities are ________.

(Multiple Choice)

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Question 53

Berry Rich,Inc.had $600,000 in total assets,of which $200,000 are current assets,and $200,000 in shareholders' equity,of which $80,000 is contributed capital.Calculate the debt-to-equity ratio.Round your answer to the nearest whole percent.

(Short Answer)

5.0/5

(91)

Question 54

The present value of $100,000 at 5% to be received at the end of ten years will be greater than the present value of $100,000 at 6% to be received at the end of ten years.

(True/False)

4.9/5

(77)

Question 55

Risks associated with debt affect both a company and its creditors.

(True/False)

4.9/5

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Question 56

Stanton Corporation sold a 10-year,$1,000,zero-interest bond when the market rate of interest was 7%.The present value of the principal is ________.

(Multiple Choice)

4.9/5

(80)

Question 57

Match each of the following terms with the appropriate situation below.

Tom's Wear issued bonds that mature in 2015.

callable bonds

Tom's Wear issued bonds that can be recalled and redeemed by Toms' Wear beginning in 2011.

convertible bonds

Tom's Wear issued bonds that can be converted into Tom's Wear stock.

serial bonds

Correct Answer:

Verified

Tom's Wear issued bonds that mature in 2015.

Tom's Wear issued bonds that can be recalled and redeemed by Toms' Wear beginning in 2011.

Tom's Wear issued bonds that can be converted into Tom's Wear stock.

Tom's Wear issued bonds that mature in 2011,2010,2011,and 2012.

(Matching)

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(77)

Question 58

Explain the difference between a secured bond and a debenture.

(Essay)

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Question 59

The higher the debt-to-equity ratio the greater the positive financial leverage.

(True/False)

4.9/5

(97)

Question 60

Showing 41 - 60 of 308

Brooke's Bike Company sold 225 mountain bikes in October.The future estimated warranty cost for the bikes is $25 per bike.The warranty period is one year.The amount of warranty expense for October is $468.75

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.Nadir uses the effective interest method of amortization.With each annual interest payment the unamortized _ will grow _.

On October 31,2011,Bondable,Inc.issued $20,000 of 10-year,6% bonds at 100.The bonds pay interest annually on October 31.How much cash will the company pay for interest on October 31,2012,the first interest payment date?

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.On its balance sheet at December 31,2011,Nadir will show bonds payable of $1,000,000 ________.

The debt-to-equity ratio ________.

When a bond sells for par value,its stated interest rate is ________.

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.How much cash did Nadir receive when the bonds were sold?

On July 1,2011,Ace Electronics issued $10 million dollars of 8%,20-year bonds at 102.The bonds pay interest semiannually on December 31 and June 30.How much cash will Ace pay when the bonds mature? Assume that the final interest payment is made separately.

Buzz Corporation issued $50,000 worth of 10-year,8% bonds for $48,359.66.The $50,000 is called the ________.

On January 1,2011,Alpha Company issued $1,000,000 of 5%,20-year bonds to buy a new computerized accounting system.The market rate of interest was 6%.The bonds pay interest annually on December 31.On its balance sheet at December 31,2011,Alpha will show bonds payable of $1,000,000 ________.

Definitely determinable liabilities are ________.

Berry Rich,Inc.had $600,000 in total assets,of which $200,000 are current assets,and $200,000 in shareholders' equity,of which $80,000 is contributed capital.Calculate the debt-to-equity ratio.Round your answer to the nearest whole percent.

The present value of $100,000 at 5% to be received at the end of ten years will be greater than the present value of $100,000 at 6% to be received at the end of ten years.

Risks associated with debt affect both a company and its creditors.

Stanton Corporation sold a 10-year,$1,000,zero-interest bond when the market rate of interest was 7%.The present value of the principal is ________.

Explain the difference between a secured bond and a debenture.

The higher the debt-to-equity ratio the greater the positive financial leverage.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters

Exam 7: Accounting for Liabilities

Brooke's Bike Company sold 225 mountain bikes in October.The future estimated warranty cost for the bikes is $25 per bike.The warranty period is one year.The amount of warranty expense for October is $468.75

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.Nadir uses the effective interest method of amortization.With each annual interest payment the unamortized _____ will grow _____.

On October 31,2011,Bondable,Inc.issued $20,000 of 10-year,6% bonds at 100.The bonds pay interest annually on October 31.How much cash will the company pay for interest on October 31,2012,the first interest payment date?

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.On its balance sheet at December 31,2011,Nadir will show bonds payable of $1,000,000 ________.

The debt-to-equity ratio ________.

When a bond sells for par value,its stated interest rate is ________.

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.How much cash did Nadir receive when the bonds were sold?

On July 1,2011,Ace Electronics issued $10 million dollars of 8%,20-year bonds at 102.The bonds pay interest semiannually on December 31 and June 30.How much cash will Ace pay when the bonds mature? Assume that the final interest payment is made separately.

Buzz Corporation issued $50,000 worth of 10-year,8% bonds for $48,359.66.The $50,000 is called the ________.

On January 1,2011,Alpha Company issued $1,000,000 of 5%,20-year bonds to buy a new computerized accounting system.The market rate of interest was 6%.The bonds pay interest annually on December 31.On its balance sheet at December 31,2011,Alpha will show bonds payable of $1,000,000 ________.

Definitely determinable liabilities are ________.

Berry Rich,Inc.had $600,000 in total assets,of which $200,000 are current assets,and $200,000 in shareholders' equity,of which $80,000 is contributed capital.Calculate the debt-to-equity ratio.Round your answer to the nearest whole percent.

The present value of $100,000 at 5% to be received at the end of ten years will be greater than the present value of $100,000 at 6% to be received at the end of ten years.

Risks associated with debt affect both a company and its creditors.

Stanton Corporation sold a 10-year,$1,000,zero-interest bond when the market rate of interest was 7%.The present value of the principal is ________.

Explain the difference between a secured bond and a debenture.

The higher the debt-to-equity ratio the greater the positive financial leverage.

Business: Whats It All About

Qualities of Accounting Information

Accruals and Deferrals: Timing Is Everything in Accounting

Payment for Goods and Services: Cash and Accounts Receivable

The Purchase and Sale of Inventory

Acquisition and Use of Long-Term Assets

Accounting for Shareholders Equity

Preparing and Analyzing the Statement of Cash Flows

Using Financial Statement Analysis to Evaluate Firm Performance

Quality of Earnings, corporate Governance, and Ifrs

Filters

On January 1,2011,Nadir Company issued $1,000,000 of 6%,20-year bonds when the market rate of interest was 5%.The bonds pay interest annually on December 31.Nadir uses the effective interest method of amortization.With each annual interest payment the unamortized _ will grow _.