Project #42943 - acct

Fixed assets are ordinarily presented in the balance sheet
 
 
 
 
  When the market rate of interest is less than the contract rate for a bond, the bond will sell for a premium.
 
 

A $300,000 bond was redeemed at 104 when the carrying value of the bond was $315,000. The entry to record the redemption would include a

 
 
 
 
When the market rate of interest on bonds is higher than the contract rate, the bonds will sell at
 
 
 
 
The amount of depreciation expense for a fixed asset costing $95,000, with an estimated residual value of $5,000 and a useful life of 5 years or 20,000 operating hours, is $21,375 by the units-of-production method during a period when the asset was used for 4,500 hours.
 

When the corporation issuing the bonds has the right to repurchase the bonds prior to the maturity date for a specific price, the bonds are

 
 
 
 
   
7.  
 
If bonds are sold for a discount, the carrying value of the bonds is equal to the face value less the unamortized discount.
 

 

 

The balance in Premium on Bonds Payable should be reported as a deduction from Bonds Payable on the balance sheet.
 

 

 

The Bacon Company acquired new machinery with a price of $15,200 by trading in similar old machinery and paying $12,700. The old machinery originally cost $9,000 and had accumulated depreciation of $5,000. In recording this transaction, Bacon Company should record
 
 
 
 
An asset was purchased for $120,000 on January 1, 2010 and originally estimated to have a useful life of 10 years with a residual value of $10,000. At the beginning of 2012, it was determined that the remaining useful life of the asset was only 4 years with a residual value of $2,000. Calculate the 2012 depreciation expense using the revised amounts and straight line method.
 
 
 
 
   
Capital expenditures are costs that are charged to Stockholders' Equity accounts.
 
 
 
On June 1, 2014, Aaron Company purchased equipment at a cost of $120,000 that has a depreciable cost of $90,000 and an estimated useful life of 3 years and 30,000 hours. Using straight line depreciation, calculate depreciation expense for the first year.
 
 
 
 
   
The proper journal entry to purchase a computer costing $975 on account on January 2 to be utilized within the business would be:
 
 
 
 
   
The amount of the depreciation expense for the second full year of use of a fixed asset costing $100,000, with an estimated residual value of $5,000 and a useful life of 4 years, is $25,000 by the declining-balance method at twice the straight-line rate.
 
 

The cost of replacing an engine in a truck is an example of ordinary maintenance.
 

 

16.  
 
It is not necessary for a company to use the same depreciation method for financial statements and for determining income taxes.
 

 

Balance sheet and income statement data indicate the following:
Bonds payable, 6% (issued 2000, due 2020) $1,200,000
Preferred 8% stock, $100 par  
(no change during the year) 200,000
Common stock, $50 par  
(no change during the year) 1,000,000
Income before income tax for year 340,000
Income tax for year 80,000
Common dividends paid 60,000
Preferred dividends paid 16,000
Based on the data presented above, what is the number of times bond interest charges were earned (round to two decimal places)?
 
 
 
 

 

On December 31, Strike Company has decided to trade-in one of its batting cages for another one that has a cost of $500,000. The seller of the batting cage is willing to allow a trade-in amount of $11,000. The initial cost of the old equipment was $215,000 with an accumulated depreciation of $185,000. Depreciation has been taken up to the end of the year. The difference will be paid in cash. What is the amount of the gain or loss on this transaction?
 
 
 
 
The acquisition costs of property, plant, and equipment should include all normal, reasonable and necessary costs to get the asset in place and ready for use.
 
 
 
   
On January 1, 2011, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments consisting of principal and interest of $15,179, beginning on December 31, 2011. The December 31, 2011 carrying amount in the amortization table for this installment note will be equal to:
 
 
 

$27,635

 
   
Which of the following is included in the cost of constructing a building?
 
 
 
 
The journal entry a company records for the payment of interest, interest expense, and amortization of bond premium is
 
 
 
 
 
The present value of the periodic bond interest payments is the value today of the amount of interest to be received at the at the end of each interest period.
 

 

Bonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If the issuing corporation redeems the bonds at 103, what is the amount of gain or loss on redemption?

 
 
 
 

 

If the straight-line method of amortization of bond premium or discount is used, which of the following statements is true?
 
 
 
 

When a company exchanges machinery and receives a trade-in allowance greater than the book value, this transaction would be recorded with the following entry (assuming the exchange was considered to have commercial substance):
 
 
 
 
Xtra Company purchased goodwill from Argus for $96,000. Argus had developed the goodwill over 12 years. How much would Xtra amortize the goodwill for its first year?
 
 
 
 
The method used to calculate the depletion of a natural resource is the straight line method.
 
 
 building with an appraisal value of $154,000 is made available at an offer price of $172,000. The purchaser acquires the property for $40,000 in cash, a 90-day note payable for $45,000, and a mortgage amounting to $75,000. The cost basis recorded in the buyer's accounting records to recognize this purchase is
 
 
 
 
   
A capital lease is accounted for as if the asset has been purchased.
 
 

Selling the bonds at a premium has the effect of

causing the interest expense to be higher than the bond interest paid.

 

raising the effective interest rate above the stated interest rate.

 

causing the interest expense to be lower than the bond interest paid.

 

attracting investors that are willing to pay a lower rate of interest than on similar bonds.

 
The entry to record the amortization of a premium on bonds payable on an interest payment date includes:
 
 
 
 

 

The normal balance of the accumulated depreciation account is debit.
 

 

 

fixed asset with a cost of $30,000 and accumulated depreciation of $28,500 is sold for $3,500. What is the amount of the gain or loss on disposal of the fixed asset?

 

 
 
 
 
The transfer to expense of the cost of intangible assets attributed to the passage of time or decline in usefulness is called amortization.
 
 
 
   
A gain can be realized when a fixed asset is discarded.
 
 
 
 
For tax purposes, a Limited Liability Company may elect to be treated as a partnership.
 
 
 
 
An equal stream of periodic payments is called an annuity.
 
 
When the effective-interest method is used, the amortization of the bond premium
 
 
 
 
If there is no written agreement as to the way income will be divided among partners
 
 
 
 

 

 

The distribution of cash, as the final process in winding up the affairs of a partnership, is based on the income-sharing ratio.
 

 

 

 

Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann respectively and 10% interest on original capital. If they agree to share remaining profits and losses on a 3:2 ratio, what will Singer's share of the income (loss) be if the net loss for the year was $10,000?

 
 
 
 
 

 

To a major resort, timeshare properties would be classified as property, plant and equipment.
 

 

 

The entry to record the disposal of fixed assets will include a credit to accumulated depreciation.
 
 
 
 

 

The journal entry a company records for the payment of interest, interest expense, and amortization of bond discount is
 
 
 
 
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 $3,000, would have a cost basis of
 
 
 
 

If bonds are issued at a premium, the stated interest rate is

 
 
 
 

 

The Miracle Corporation issues 1,000, 10-year, 8%, $1,000 bonds dated January 1, 2011, at 96. The journal entry to record the issuance will show a

debit to Discount on Bonds Payable for $40,000.

 
 

credit to Cash for $960,000.

 
 
     
   
The present value of $30,000 to be received in two years, at 12% compounded annually, is (rounded to nearest dollar)
 
 
 

 

 

The present value of $40,000 to be received in one year, at 6% compounded annually, is (rounded to nearest dollar)
 
 
 
 
   
Bonds Payable has a balance of $1,000,000 and Discount on Bonds Payable has a balance of $15,500. If the issuing corporation redeems the bonds at 98.5, what is the amount of gain or loss on redemption?
 
 
 
 
   
Use the following information to answer the following questions. Izabelle and Marta are forming a partnership. Izabelle will invest a piece of equipment with a book value of $7,500 and a fair market value of $20,000. Marta will invest a building with a book value of $40,000 and a fair market value of $58,000.

 

What amount will be recorded to Izabelle's capital account?
 
 
 
 
   
A bond is usually divided into a number of individual bonds of $500 each.
 

 

 

Benson and Orton are partners who share income in the ratio of 2:3 and have capital balances of $60,000 and $40,000 respectively. Ramsey is admitted to the partnership and is given a 40% interest by investing $20,000. What is Benson's capital balance after admitting Ramsey?
 
 
 
 
 

 

Expenditures for research and development are generally recorded as
 
 
 
 
Balance sheet and income statement data indicate the following:
Bonds payable, 8% (issued 1990, due 2015) $1,200,000
Preferred 8% stock, $100 par  
(no change during the year) 200,000
Common stock, $50 par  
(no change during the year) 1,000,000
Income before income tax for year 320,000
Income tax for year 80,000
Common dividends paid 60,000
Preferred dividends paid 16,000
Based on the data presented above, what is the number of times bond interest charges were earned (round to two decimal places)?
 
 
 
 
When the effective interest method of amortization is used, the amount of interest expense for a given period is calculated by multiplying the face rate of interest by the bond's carrying value at the beginning of the given period.
 

 

 

 

A new partner may be admitted to a partnership by

 
 
 
 
When a major corporation develops its own trademark and over time it becomes very valuable, the trademark may not be shown on their balance sheet due to lack of a material cost.
 
 
 
Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $40,000 and $60,000 respectively. Income Summary has a credit balance of $20,000. What is Saturn's capital balance after closing Income Summary to Capital?
 
 
 
 
   
The statement of members' equity is used for equity reporting of a partnership.
 

 

 

If the share of losses on realization of the sale of noncash assets exceed the balance in a partner's capital account, the resulting balance is called a deficiency.
 

 

 

If the market rate of interest is greater than the contractual rate of interest, bonds will sell

at face value.

 

at a premium.

 
 
 
An estimate of the amount which an asset can be sold at the end of its useful life is called residual value.
 

 

 

If a company borrows money from a bank as an installment note, the interest portion of each annual payment will:
 
 
 
 
 

 

 

 

The balance in Discount on Bonds Payable that is applicable to bonds due in 2015 would be reported on the balance sheet in the section entitled
 
 
 
 
 

 

 

 

 

 

 

There is a loss on redemption of bonds when bonds are redeemed above carrying value.
 

 

 


The market rate of interest is affected by a variety of factors, including investors' assessment of current economic conditions.
 

 

 

Numbers of times interest charges earned is computed as
 
 
 
 
 

 

For income tax purposes most companies use an accelerated deprecation method called double declining balance.
 
 

 

 

 

Subject Mathematics
Due By (Pacific Time) 10/10/2014 05:00 pm
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