Question

A) The present value of $45,000 to be received in one year, at 6% compounded annually, is (rounded to nearest dollar) ______ .
Use the present value table in Exhibit 8.

a.$42,056

b.$45,000

c.$42,453

d.$40,179

B) Balance sheet and income statement data indicate the following:

Bonds payable, 7% (due in 15 years)	$1,344,009
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	$444,339
Income tax for year	$133,302
Common dividends paid	$60,000
Preferred dividends paid	$16,000

Based on the data presented above, what is the times interest earned ratio (round to two decimal places)?

a.5.72

b.4.72

c.2.31

d.3.31

C) On January 1 of the current year, Barton Corporation issued 7% bonds with a face value of $119,000. The bonds are sold for $113,050. The bonds pay interest semiannually on June 30 and December 31, and the maturity date is December 31, five years from now. Barton records straight-line amortization of the bond discount. The bond interest expense for the year ended December 31 is

a.$10,115

b.$595

c.$4,165

d.$9,520

Answer 1