Question 13
If the market interest rate is greater than the contractual interest rate, bonds will sell

A.at a discount.
B.only after the stated interest rate is increased.
C.at face value.
D.at a premium.

Question 15
If the market interest rate is 5%, a $10,000, 6%, 10-year bond that pays interest annually would sell at an amount

A.greater than face value.
B.less than face value.
C.that cannot be determined.
D.equal to face value.

Question 16
Oriole Company issues 1600, 10-year, 8%, $1000 bonds dated January 1, 2020, at 98. The journal entry to record the issuance will show a

A.debit to Cash for $1568000
B.debit to Cash of $1600000.
C.credit to Discount on Bonds Payable for $32000.
D.credit to Bonds Payable for $1632000.

Question 17
The market interest rate is often called the

A.coupon rate.
B.effective rate.
C.contractual rate.
D.stated rate.

Question 19
If the present value of lease payments equals or exceeds 90% of the fair value of the leased property, the

A.conditions are met for the lease to be considered a capital lease.
B.lease is uneconomical and should not be entered into.
C.lease may be classified as an operating lease.
D.recording of a lease liability is optional—that is, the off-balance sheet approach can be elected.

Question 20
A lease where the intent is temporary use of the property by the lessee with continued ownership of the property by the lessor is called

A.a capital lease.
B.an operating lease.
C.a purchase of property.
D.off-balance sheet financing.

Question 18
3400 bonds with a face value of $1000 each, are sold at 105. The entry to record the issuance is

A.Cash   3570000     
Premium on Bonds Payable      170000
Bonds Payable      3400000

B.Cash   3400000     
Premium on Bonds Payable   170000     
Bonds Payable      3570000

C.Cash   3570000     
Discount on Bonds Payable       170000
Bonds Payable      3400000

D.Cash   3570000     
Bonds Payable      3570000

Question 14
On January 1, 2020, Vaughn Manufacturing issued $5800000, 10-year, 4% bonds at 102. Interest is payable annually on January 1. The journal entry to record this transaction on January 1, 2020 is

A.Cash   5800000     
Bonds Payable      5800000

B.Cash   5916000     
Bonds Payable      5916000

C.Premium on Bonds Payable   116000     
Cash   5800000     
Bonds Payable      5916000

D.Cash   5916000     
Bonds Payable       5800000
Premium on Bonds Payable      116000

On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,190,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $850,000, retained earnings of $400,000, and a noncontrolling interest fair value of $510,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.

During the next two years, Smashing reported the following:

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.

RED Corp. granted options for 20,000 common shares to certain executives on January 1, 2019, when the market price was $52 per share. The option price is $44 per share and the options must be exercised between January 1, 2021, and December 31, 2023, after which time they expire. The options state that the related service period is January 1, 2019 to December 31, 2020. An options pricing model determined that, at the date of grant, the estimated fair value of these options was $1,000,000. Assume that RED Corp. follows IFRS.

REQUIRED:

(a) Calculate total compensation expense, consistent with IFRS.

(b) Explain when compensation expense should be recognized, consistent with IFRS. Is this reasonable? Explain.

(c) Prepare journal entries for the following, consistent with IFRS (items 3 and 4 are independent assumptions). :

1. To record the issuance of the options (grant of options) on January 1, 2019.

2. To record the compensation expense, if any. Date the entry(ies). Assume all employees remain employed by RED Corp.

3. To record the exercise of the options, assuming all of the options were exercised on the earliest possible date, January 1, 2021.

4. To record the expiration of the options, assuming all of the options were not exercised because the market price fell below the exercise price before January 1, 2021 and stayed below the exercise price for the balance of the option period.

economic impact that texas rangers have on host city

1) A ten-year T-bond has an eight percent coupon, and an eight-year T-bond has a ten percent coupon. These bonds are not callable and both have the same risk. If the yield to maturity (required rate of return) of both bonds increases by the same amount, which of the following statements would be CORRECT?

a) The prices of both bonds will decrease by the same amount.

b) The prices of both bonds would increase by the same amount.

c) Both bonds would decline in price, but the 10-year bond would have the greater percentage decline in price.

d) One bond's price would increase, while the other bond’s price would decrease.

2) Which of the following bonds would have the greatest percentage increase in value if all interest rates in the economy fall by one percent? (be able to explain something like this in the exam)

a) 10-year, zero coupon bond.

b) 1-year, 10% coupon bond.

c)  20-year, 5% coupon bond.

d) 20-year, zero coupon bond.

3) An investor is considering buying one of two 10-year, $1,000 face value, non-callable bonds: Bond Alpha has a seven percent annual coupon, while Bond Beta has a nine percent annual coupon. Both bonds have a yield to maturity of eight percent, and the YTM is expected to remain constant for the next ten years. Which of the following statements is CORRECT?

a)  Bond Alpha has a higher price than Bond B today, but one year from now the bonds will have the same price.

b) Bond Beta has a higher price than Bond Alpha today, but one year from now the bonds will have the same price.

c) Bond Alpha’s current yield is greater than 8%.

d)  One year from now, Bond Alpha’s price will be higher than it is today.

4) Bond Apple has a nine percent annual coupon, while Bond Intel has a seven percent annual coupon. Both bonds have the same maturity, a face value of $1,000, an eight percent YTM, and are non-callable. Which of the following statements is CORRECT?

a) Bond Apple’s capital gains yield is greater than Bond Intel’s capital gains yield.

b)  If the yield to maturity for both bonds immediately decreases to 6%, Bond Apple’s bond will have a larger percentage increase in value.

c)  Bond Apple trades at a discount, whereas Bond Intel trades at a premium.

d) Bond Apple’s current yield is greater than that of Bond Intel.

1/As of December 31, 2018, Amy Jo's Appliances had unadjusted account balances in accounts receivable of $305,000 and $930 in the allowance for uncollectible accounts, following 2018 write-offs of $6,390 in bad debts. An analysis of Amy Jo's December 31, 2018, accounts receivable suggests that the allowance for uncollectible accounts should be 2% of accounts receivable. Bad debt expense for 2018 should be:

Multiple Choice

• $6,390.

• $6,100.

• $5,170.

• None of these answer choices are correct.

2/ Nu Company reported the following pretax data for its first year of operations.

What is Nu's gross profit ratio if it elects LIFO? (Round your answer to the nearest whole percentage.)

Multiple Choice

• 61%.

• 21%.

• 52%.

• 56%.

3/ Bond Company adopted the dollar-value LIFO inventory method on January 1, 2018. In applying the LIFO method, Bond uses internal cost indexes and the multiple-pools approach. The following data were available for Inventory Pool No. 3 for the two years following the adoption of LIFO:

Under the dollar-value LIFO method, the inventory at December 31, 2019, should be

Multiple Choice

• $362,090.

• $355,000.

• $355,820.

• None of these answer choices are correct.

4/ Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:

ry of apparel would be valued at:

Multiple Choice

• $116,000.

• $100,800.

• $78,400.

• $104,880.

3-Leonardo, who is married but files separately, earns $220,000 of taxable income. He also has $18,500 in city of Tulsa bonds. His wife, Theresa, earns $57,000 of taxable income. If Leonardo earned an additional $73,000 of taxable income this year, what would be the marginal tax rate on the extra income for year 2018? (Use tax rate schedules) a-37.17% b-29.98 c-35.17 d-35

You have the opportunity to buy a piece of land with your brother-in-law, Joseph Wheeler Dealer. The land can be purchased for $1,500,000 and Joseph is 100% positive that it can be sold for $2,250,000 in seven years. In fact, he will guarantee this sale price (assume the $2,250,000 is actually achieved). As he says, "this is a no-brainer 50% return." What do you think the actual returns will be? The property is in Miami-Dade County Florida and needs to be fenced. You might also need liability insurance. You can pay cash or finance the project (easier to model a cash transaction). The cleanest assumption is to assume no debt. (There are no "tricks' to this, you just need to an investment analysis and think about all fees, income and costs associated with transaction). Do you have all the holding costs? Probably the best way to do this is with a short excel program. This requires TVM calculations! Is this a 50% return? Or is that golf club accounting.

INVOLVE was incorporated as a not-for-profit voluntary health and welfare organization on January 1, 2020. During the fiscal year ended December 31, 2020, the following transactions occurred.

1. A business donated rent-free office space to the organization that would normally rent for $36,300 a year.
2. A fund drive raised $191,500 in cash and $113,000 in pledges that will be paid within one year. A state government grant of $163,000 was received for program operating costs related to public health education.
3. Salaries and fringe benefits paid during the year amounted to $209,860. At year-end, an additional $17,300 of salaries and fringe benefits were accrued.
4. A donor pledged $113,000 for construction of a new building, payable over five fiscal years, commencing in 2022. The discounted value of the pledge is expected to be $95,560.
5. Office equipment was purchased for $13,300. The useful life of the equipment is estimated to be four years. Office furniture with a fair value of $10,900 was donated by a local office supply company. The furniture has an estimated useful life of 10 years. Furniture and equipment are considered net assets without donor restrictions by INVOLVE.
6. Telephone expense for the year was $6,500, printing and postage expense was $13,300 for the year, utilities for the year were $9,600 and supplies expense was $5,600 for the year. At year-end, an immaterial amount of supplies remained on hand and the balance in accounts payable was $4,900.
7. Volunteers contributed $16,300 of time to help with answering the phones, mailing materials, and various other clerical activities.
8. It is estimated that 80 percent of the pledges made for the 2021 year will be collected. Depreciation expense is recorded for the full year on the assets recorded in item 5.
9. All expenses were allocated to program services and support services in the following percentages: public health education, 40 percent; community service, 20 percent; management and general, 20 percent; and fund-raising, 20 percent.
10. Net assets were released to reflect satisfaction of state grant requirements that the grant resources be used for public health education program purposes.
11. All nominal accounts were closed to the appropriate net asset accounts.

Choices:

• No Journal Entry Required
• Accounts Payable
• Allowance for Depreciation—Equipment and Furniture
• Allowance for Uncollectible Pledges—Unrestricted
• Cash
• Commission Revenue
• Community Art Education Program
• Community Service Program
• Contributions Receivable
• Contributions—With Donor Restrictions—Program
• Contributions—With Donor Restrictions—Time
• Contributions—Without Donor Restrictions
• Deferred Revenue
• Depreciation Expense
• Discount on Contributions Receivable
• Equipment and Furniture
• Exhibition Program
• Fund-Raising
• Grants Receivable
• Investment Income—With Donor Restrictions
• Investment Income—Without Donor Restrictions
• Management and General
• Membership Dues
• Miscellaneous Expense
• Net Assets Released—Satisfaction of Purpose Restriction—With Donor Restrictions
• Net Assets Released—Satisfaction of Purpose Restriction—Without Donor Restrictions
• Net Assets With Donor Restrictions
• Net Assets Without Donor Restrictions
• Payable to Artists
• Prepaid Expenses
• Printing and Postage Expense
• Program Expenses
• Provision for Uncollectible Pledges
• Public Health Education Program
• Rent Expense
• Salaries and Benefits Expense
• Salaries and Benefits Payable
• Short-Term Investments
• Supplies Expense
• Telephone Expense
• Tuition and Fees
• Utilities Expense

1. Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost Performance goals, often relating to how much a product should cost.standards per 100 two-liter bottles are as follows:

   Cost Category		Standard Cost per 100 Two-Liter Bottles
   Direct labor			$1.54
   Direct materials			5.9
   Factory overhead			0.28
   	Total		$7.72

   At the beginning of July, GBC management planned to produce 490,000 bottles. The actual number of bottles produced for July was 529,200 bottles. The actual costs for July of the current year were as follows:

   Cost Category		Actual Cost for the Month Ended July 31
   Direct labor						$7,987
   Direct materials						30,473
   Factory overhead						1,497
   	Total					$39,957

   Enter all amounts as positive numbers.

   a. Prepare the July manufacturing A detailed estimate of what a product should cost.standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

   Genie in a Bottle Company
   Manufacturing Cost Budget
   For the Month Ended March 31
   	Standard Cost at Planned Volume (490,000 Bottles)
   Manufacturing costs:
   Direct labor	$
   Direct materials
   Factory overhead
   Total	$

   Feedback

   b. Prepare a budget performance report for manufacturing costs, showing the total The difference between actual cost and the flexible budget at actual volumes.cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to two decimal places.

   Genie in a Bottle Company
   Manufacturing Costs-Budget Performance Report
   For the Month Ended March 31
   	Actual Costs	Standard Cost at Actual Volume (529,200 Bottles)	Cost Variance- (Favorable) Unfavorable
   Manufacturing costs:
   Direct labor	$	$	$
   Direct materials
   Factory overhead
   Total manufacturing cost	$	$	$

   Feedback

   c. The Company's actual costs were $897.24

   • more
   • less
   than budgeted.
   • Favorable
   • Unfavorable
   direct labor and direct material cost variances more than offset a small
   • favorable
   • unfavorable
   factory overhead cost variance.

World Company expects to operate at 80% of its productive capacity of 56,250 units per month. At this planned level, the company expects to use 27,900 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.620 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $69,750 fixed overhead cost and $320,850 variable overhead cost. In the current month, the company incurred $361,000 actual overhead and 24,900 actual labor hours while producing 40,000 units.

(1) Compute the overhead volume variance.
(2) Compute the overhead controllable variance

In Unit 1 we covered the entire accounting cycle and the foundation of accounting in:

• Chapter 1 - The Role of Accounting in Society
• Chapter 2 - Introduction to Financial Statements
• Chapter 3 - Analyzing and Recording Transactions
• Chapter 4 - The Adjustment Process
• Chapter 5 - Completing the Accounting Cycle
• Chapter 7 - Accounting Information Systems

Specifically in Chapter 3 - Analyzing and Recording Transactions we learned about the principles, assumptions, and concepts of accounting. Also, in Chapter 5 - Completing the Accounting Cycle we learned about all of the steps in the accounting cycle.

Prompt:

There are two (2) options for the Unit 1 Project:

1. Choose one (1) of the principles, assumptions, or concepts described in chapter 3 and determine which one is important for generally accepted accounting principles (GAAP). OR
2. Choose one (1) of the steps of the accounting cycle in chapter 5 and determine which one has the greatest effect on our financial statements.

Leonardo, who is married but files separately, earns $190,000 of taxable income. He also has $16,250 in city of Tulsa bonds. His wife, Theresa, earns $70,000 of taxable income. If Leonardo and his wife file married filing jointly in 2018, what would be their effect tax rate (rounded)? (Use tax rate schedule)

Periodic Inventory by Three Methods; Cost of Merchandise Sold

The units of an item available for sale during the year were as follows:

There are 80 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost and the cost of merchandise sold by three methods. Round interim calculations to one decimal and final answers to the nearest whole dollar.