Multiple Choice Question 40
Which of the following isnot a condition necessary to exclude a short-term obligation from current liabilities?
Obligation must be due within one year.
Demonstrate the ability to complete the refinancing.
Intend to refinance the obligation on a long-term basis.
Multiple Choice Question 93
Coronado Industries borrowed $410000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?
$0.
$32800.
$36900.
$49200.
Multiple Choice Question 95
Bramble owes $4.3 million that is due on February 28. The company borrows $3520000 on February 25 (5-year note) and uses the proceeds to pay down the $4.3million note and uses other cash to pay the balance. How much of the $4.3 million note is classified as long-term in the December 31 financial statements?
$3520000.
$780000.
$4300000.
$0.
Multiple Choice Question 111
Vaughn Manufacturing has 50 employees who work 8-hour days and are paid hourly. On January 1, 2017, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2017 may first be taken on January 1, 2018. Information relative to these employees is as follows:
Year
Hourly
Wages
Vacation Days Earned
by Each Employee
Vacation Days Used
by Each Employee
2017
$35.50
10
0
2018
37.50
10
8
2019
40.50
10
10
Vaughn has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned.
What is the amount of the accrued liability for compensated absences that should be reported at December 31, 2019?
$192000.
$418800.
$162000.
$217200.
Multiple Choice Question 120
Crane Company self-insures its property for fire and storm damage. If the company were to obtain insurance on the property, it would cost them $1900000 per year. The company estimates that on average it will incur losses of $1590000 per year. During 2018, $690000 worth of losses were sustained. How much total expense and/or loss should be recognized by Crane Company for 2018?
$0 in losses and $1590000 in insurance expense
$690000 in losses and no insurance expense
$690000 in losses and $665000 in insurance expense
$0 in losses and $1900000 in insurance expense
Multiple Choice Question 62
On January 1, 2017, Sheridan Company issued eight-year bonds with a face value of $6080000 and a stated interest rate of 10%, payable semiannually on June 30 and December 31. The bonds were sold to yield 12%. Table values are:
Present value of 1 for 8 periods at 10%
0.467
Present value of 1 for 8 periods at 12%
0.404
Present value of 1 for 16 periods at 5%
0.458
Present value of 1 for 16 periods at 6%
0.394
Present value of annuity for 8 periods at 10%
5.335
Present value of annuity for 8 periods at 12%
4.968
Present value of annuity for 16 periods at 5%
10.838
Present value of annuity for 16 periods at 6%
10.106
The issue price of the bonds is
$6083040.
$5467744.
$5476864.
$5528544.
Multiple Choice Question 74
A company issues $25700000, 9.8%, 20-year bonds to yield 10% on January 1, 2017. Interest is paid on June 30 and December 31. The proceeds from the bonds are $25259010. What is interest expense for 2018, using straight-line amortization?
$2540650
$2518600
$2491169
$2527399
Multiple Choice Question 87
At December 31, 2017 the following balances existed on the books of Coronado Industries:
Bonds Payable
$5960000
Discount on Bonds Payable
847000
Interest Payable
158000
If the bonds are retired on January 1, 2018, at 101, what will Coronado report as a loss on redemption?
$748600
$596000
$1064600
$906600
Multiple Choice Question 109
On January 1, 2018, Sheridan Company sold $5050000 of its 8% bonds for $4470740 to yield 10%. Interest is payable semiannually on January 1 and July 1. What amount should Sheridan report as interest expense for the six months ended June 30, 2018?
$178836
$223537
$252500
$202000
Multiple Choice Question 71
Presented below is information related to Concord Corporation:
Common Stock, $1 par
$3410000
Paid-in Capital in Excess of Par?Common Stock
560000
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