Question

4. On January 1 of Year 1, Congo Express Airways issued $4,600,000 of 7%, bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $4,280,000 and the market rate of interest for similar bonds is 9%. The bond premium or discount is being amortized using the straight-line method at a rate of $10,000 every 6 months. The life of these bonds is:

9. Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership’s capital balances are Caitlin, $132,000; Chris, $92,000; and Molly, $112,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $172,000. The balance in Caitlin’s capital account immediately after Paul’s admission is:

14. Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership’s capital balances are Caitlin, $132,000; Chris, $92,000; and Molly, $112,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $172,000. The balance in Caitlin’s capital account immediately after Paul’s admission is:

16. Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $286,000, and Atkins' beginning partnership capital balance for the current year is $167,000. The partnership had net income of $172,000 for the year. Barber withdrew $57,000 during the year and Atkins withdrew $45,000. What is Atkins's return on equity?

Answer 1

.4)

Discount on bonds = $320000

Amortization per yr = $20000

Hence life of bond = Time taken to amortize the discount

                            = 16 years.