Which of the following best describes Accrued Liabilities ?

1. Which of the following best describes Accrued Liabilities? • Long-term liabilities • Current amounts owed to suppliers • Expenses incurred but not yet paid • Revenues that have been collected but not earned

2. Corrie Company borrows $88,500 on September 1, 2010, from the bank by signing a 12% 1-year note. What is the accrued interest at December 31, 2010? • $2,655 • $3,540 • $4,425 • $10,620

3. When recording payroll: • gross earnings are recorded as wages payable • net pay is recorded as wage expense • payroll deductions are recorded with debits • payroll deductions are recorded as liabilities

4. A bond is selling at 95. The face of the bond is $1000. What is the sale price? • $ 950 • $1,000 • $1,050 • $ 95

5. One thousand bonds with a face value of $1,000 each, are sold at 97. The entry to record the issuance is • Cash 1,030,000 Bonds Payable 1,030,000 • Cash 970,000 Discount on B/P 30,000 Bonds Payable 1,000,000 • Cash 1,030,000 Premium on B/P 30,000 Bonds Payable 1,000,000 • Cash 1,000,000 Discount on B/P 30,000 • Bonds Payable 970,000

6. $1,000,000 5% bonds are sold at 97. Is the stated rate of interest higher or lower than the market rate? • Contract rate = market rate • Contract rate < market rate • Contract rate > market rate

7. $1,000,000 5 year bonds with a stated rate of 5% are sold at 97 (market rate 7%). Assuming interest is paid annually, what is the annual cash interest payment to bondholders? • $48,500 • $50,000 • $70,000 • $60,000

8. $1,000,000 5 year bonds with a stated rate of 5% are sold at 97 (market rate 7%). Assuming straight line amortization, what is the amount of discount amortization each year? • $6,000 • $10,000 • $14,000 • $30,000

9. Given that annual interest payments total $50,000 and the annual discount amortization is $6,000, what is the amount of interest expense each year? • $6,000 • $50,000 • $44,000 • $56,000

10. Interest Discount Interest CarryingDatePaymentAmortizationExpenseValueIssuance $970,000EOY1 $50,000 $6,000 $56,000 Given the above partial amortization schedule, what is the carrying value of the bonds at EOY1? • $1,020,000 • $ 920,000 • $ 976,000 • $ 964,000

11. Regardless of whether bonds originally sold at face value, at a discount or at a premium, at maturity, the carrying value of the bonds will equal: • Selling Price • Zero • Face Value • I’m so confused…….

12. Which of the following does not impact the calculation of the cash interest payments to be made to bondholders? • Face value of the bond • Stated interest rate • Market interest rate • The length of time between payments

13. $1,000,000 5 year bonds with a stated rate of 7% are sold at 102 (market rate 5%). Assume straight line amortization. What is the carrying value of the bonds at EOY1? • $1,020,000 • $1,016,000 • $1,000,000 • $ 930,000

14. On Jan 1, Anthony Corp issued $1,000,000, 14%, 5-year bonds when the market rate of interest was 12%. What did the bonds sell for? • $1,072,072 • $1,000,034 • $1,073,607 • $ 999,952

15. Kant Corp retires its $100,000 face value bonds at 105 when the carrying value of the bonds is $103,745. The entry to record the bond redemption will include a • Credit of $3,745 to Loss on Redemption • Debit of $3,745 to Gain on Redemption • Credit of $1,255 to Gain on Redemption • Debit of $1,255 to Loss on Redemption

16. Xbox Corporation has 100,000 shares of common stock authorized. 75,000 shares have been issued and 10,000 have been reacquired as treasury stock. How many shares are outstanding? • 100,000 shares • 75,000 shares • 65,000 shares • 25,000 shares

17. Stockholders’ Equity, 1/1/09:C/S, $5 par, 30,000 shares issued, 26,000 shares outstanding 150,000PIC-C/S 240,000 Retained Earnings 490,000Treasury Stock (4,000 shares) 54,000What is the amount of “Total Stockholders’ Equity”? • $934,000 • $390,000 • $826,000 • $444,000

18. Xbox Corp. has 10,000 shares 8%, $100 par value, noncumulative preferred stock at 12/31/10. No dividends were declared for ’08 or ’09. If Xbox wants to pay $375,000 of dividends in 2010, how much will the common shareholders receive? • $0 • $295,000 • $215,000 • $135,000

19. Xbox Corp. has 10,000 shares 8%, $100 par value, cumulative preferred stock at 12/31/10. No dividends were declared for ’08 or ’09. If Xbox pays dividends of $375,000 in 2010, how much will the common shareholders receive? • $0 • $295,000 • $215,000 • $135,000

20. When 10,000 shares of $10 par common stock are issued at $15 per share, Paid-in-Capital is credited for: • $0 • $50,000 • $100,000 • $150,000

21. Stockholders’ Equity, 1/1/09:C/S, $5 par, 30,000 shares issued, 26,000 shares outstanding 150,000PIC-C/S 240,000 Retained Earnings 490,000Treasury Stock (4,000 shares) 54,000A 12% stock dividend was declared when the market price is $14 per share. How many shares are issued when the stock dividend is “paid”? • 480 shares • 360 shares • 3,600 shares • 3,120 shares

22. Stockholders’ Equity, 1/1/09:C/S, $5 par, 30,000 shares issued, 26,000 shares outstanding 150,000PIC-C/S 240,000 Retained Earnings 490,000Treasury Stock (4,000 shares) 54,000A 12% stock dividend was declared when the market price is $14 per share. What is the dollar value of the stock dividend? • $43,680 • $15,600 • $55,000 • $364,000

23. Which of the following would be included as an “Operating Activity” on a Statement of Cash Flows? • Receipt of cash from the issuance of bonds • Receipt of cash from the sale of equipment • Payment of cash to suppliers for inventory • Exchanging land for a truck

24. Net Income $200,000Depreciation Expense $ 40,000Dividends Paid $ 60,000Gain on Sale of Land $ 10,000 Decrease in A/R $ 20,000Decrease in A/P $ 30,000Net cash provided by operating activities is… • $160,000 • $220,000 • $240,000 • $280,000

25. Sale of Land $100,000Sale of Equipment $ 50,000 Issuance of Common Stock $ 70,000Purchase of Equipment $ 30,000 Payment of Cash Dividends $ 60,000Net cash provided by investing activities is… • $120,000 • $130,000 • $150,000 • $190,000

26. Answers to Slides 1. C 10. C 19. D 2. B 11. C 20. B 3. D 12. C 21. D 4. A 13. B 22. A 5. B 14. A 23. C 6. B 15. D 24. B 7. B 16. C 25. A 8. A 17. C 9. D 18. B