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39. a 201.When the effective-interest method of bond premium amortization is used, the a.amount of...a 201.When the effective-interest method of bond premium amortization is used, the
a.amount of premium amortized will get larger with successive amortization.
b.carrying value of the bonds will increase with successive amortization.
c.interest paid to bondholders will increase after each interest payment date.
d.interest rate used to calculate interest expense will be the contractual rate.
a 202.Silcon Company issued $1,000,000 of 6%, 10-year bonds on one of its interest dates for $863,700 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. Interest is paid annually.
What amount of discount (to the nearest dollar) should be amortized for the first interest period?
a.$28,178
b.$13,630
c.$18,192
d.$9,096
a 203.Silcon Company issued $1,000,000 of 6%, 10-year bonds on one of its interest dates for $863,700 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used. Interest is paid annually.
The journal entry on the first interest payment date, to record the payment of interest and amortization of discount will include a
a.debit to Interest Expense for $60,000.
b.credit to Cash for $69,096.
c.credit to Bonds Payable for $9,096.
d.debit to Interest Expense for $80,000.
a 204.Silcon Company issued $1,000,000 of 6%, 10-year bonds on one of its interest dates for $863,700 to yield an effective annual rate of 8%. The effective-interest method of amortization is to be used.
How much bond interest expense (to the nearest dollar) should be reported on the income statement for the end of the first year?
a.$69,278
b.$69,096
c.$68,914
d.$60,000
a 205.On January 1, Patterson Inc. issued $6,000,000, 9% bonds for $5,634,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Patterson uses the effective-interest method of amortizing bond discount. At the end of the first year, Patterson’s unamortized bond discount is
a.$329,400.
b.$342,600.
c.$309,660.
d.$306,000.
a 206.On January 1, Cleopatra Corporation issued $5,000,000, 14%, 5-year bonds with interest payable on December 31. The bonds sold for $5,360,480. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for
a.$600,000.
b.$627,455.
c.$643,258.
d.$700,000.
a 207.On January 1, Martinez Inc. issued $4,000,000, 9% bonds for $3,756,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond discount. At the end of the first year, Martinez’s unamortized bond discount is
a.$219,600.
b.$228,400.
c.$206,440.
d.$204,000.
a 208.On January 1, Polk Corporation issued $6,000,000, 14%, 5-year bonds with interest payable on July 1 and January 1. The bonds sold for $6,591,240. The market rate of interest for these bonds was 12%. On the first interest date, using the effective-interest method, the debit entry to Interest Expense is for
a.$360,000.
b.$461,388.
c.$395,474.
d.$790,950.
a 209.Which of the following statements regarding the effective-interest method of accounting for bonds characteristics is false?
a.IFRS prefers the use of the effective-interest method.
b.The amount of periodic interest expense decreases over the life of a discounted bond issue when the effective-interest method is used.
c.Over the life of the bonds, the carrying value increases for discounted bonds when using the effective-interest method.
d.The effective-interest method applies a constant percentage to the bond carrying value to compute interest expense.
a 210.On January 1, Grogan Corporation issues $2,000,000, 5-year, 12% bonds at 96 with interest payable on July 1 and January 1. Grogan uses the straight-line amortization method The carrying value of the bonds at the end of the third interest period is
a.$1,944,000
b.$1,952,000
c.$1,888,000
d.$1,856,000
40. The book balance in the checking account of Lyle’s Salon
The book balance in the checking account of Lyle’s Salon as of November 30 is $3,282.95. The bank statement shows an ending balance of $2,127.00. By examining last month’s bank reconciliation, comparing the deposits and checks written per books and per bank in November, and noting the service charges and other debit and credit memos shown on the bank statement, the following were found:
(a) An ATM withdrawal of $150.00 on November 18 by Lyle for personal use was not recorded on the books.
(b) A bank debit memo issued for an NSF check from a customer of $19.50.
(c) A bank credit memo issued for interest of $19.00 earned during the month.
(d) On November 30, a deposit of $1,177.00 was made, which is not shown on the bank statement.
(e) A bank debit memo issued for $17.50 for bank service charges.
(f) Checks No. 549, 561, and 562 for the amounts of $185.00, $21.00, and $9.40, respectively, were written during November but have not yet been received by the bank.
(g) The reconciliation from the previous month showed outstanding checks totaling $271.95. One of those checks, No. 471 for $18.65, has not yet been received by the bank.
(h) Check No. 523 written to a creditor in the amount of $372.90 was recorded in the books as $327.90.
REQUIRED
1. Prepare a bank reconciliation as of November 30.
2. Prepare the required journal entries.
41. At the end of the current month, Gil Frank prepared a trial balance for College App Services. The...
At the end of the current month, Gil Frank prepared a trial balance for College App Services. The credit side of the trial balance exceeds the debit side by a significant amount. Gil has decided to add the difference to the balance of the miscellaneous expense account in order to complete the preparation of the current month’s financial statements by a 5 o’clock deadline. Gil will look for the difference next week when he has more time.
Discuss whether Gil is behaving in a professional manner.
42. Volume-Based Costing Versus ABC Carter Company manufactures two products, Deluxe and Regular, and...
Volume-Based Costing Versus ABC
Carter Company manufactures two products, Deluxe and Regular, and uses a traditional two-stage cost allocation system. The first stage assigns all factory overhead costs to two production departments A and B, based on machine-hours. The second stage uses direct labor-hours to allocate overhead to individual products.
For 2010, the firm budgeted $1,000,000 total factory overhead cost for these operations.
Machine-hours Production Department A
4,000 Production Department B
16,000
Direct labor-hours 20,000 10,000
The following information relates to the firm’s operations for the month of January:
Units produced and sold Deluxe
200 Regular
800
Unit cost of direct materials $100 $ 50
Hourly direct labor wage rate $ 25 $ 20
Direct labor-hours in Department A per unit 2 2
Direct labor-hours in Department B per unit 1 1
Carter Company is considering implementing an activity-based costing system. Its management accountant has collected the following information for activity cost analysis for 2010:
Budgeted Budgeted Driver Consumption
Activity
Material movement Overhead
$ 7,000 Cost Driver
Number of production runs Quantity
350 Deluxe
15 Regular
20
Machine setups 400,000 Number of setups 500 25 50
Inspections 588,000 Number of units 19,600 200 800
Shipment 5,000 Number of shipments 250 50 100
$1,000,000
Required
1. Calculate the unit cost for each of the two products under the existing volume-based costing system.
2. Calculate the overhead per unit of the cost driver under the proposed ABC system.
3. Calculate the unit cost for each of the two products if the proposed ABC system is adopted.
43. 3-57 Cost of Goods Manufactured, Income Statement Norton Industries, a manufacturer of cable for...
3-57 Cost of Goods Manufactured, Income Statement Norton Industries, a manufacturer of cable for the heavy construction industry, closes its books and prepares financial statements at the end of each month. The statement of cost of goods sold for April 2010 follows:
44. P14-7 Presented below is an incomplete income statement and an incomplete comparative balance...
P14-7 Presented below is an incomplete income statement and an incomplete comparative balance sheet of Bondi Corporation.
Bondi Corporation Income Statement
For the Year Ended December 31, 2014
Net sales $10,500,000
Cost of goods sold ?
Gross profit ?
Operating expenses 1,500,000 Income from operations ?
Other expenses and losses
Interest expense ?
Income before income taxes ?
Bondi Corporation Balance Sheets December 31
Assets 2014 2013
Current assets
Cash $ 480,000
$ 375,000
Accounts receivable (net) ? 950,000
Inventory ? 1,720,000
Total current assets ? 3,045,000
Plant assets (net) 4,620,000 4,455,000
Total assets $ ? $7,500,000
Income tax expense 550,000 Net income $ ?
Assets 2014 2013
Liabilities and Stockholders’ Equity
Current liabilities $ ? $ 825,000
Long-term notes payable ? 3,300,000
Total liabilities ? 4,125,000
Common stock, $1 par 3,000,000 3,000,000
Retained earnings 400,000 375,000
Total stockholders’ equity 3,400,000 3,375,000
Total liabilities and stockholders’ equity $ ? $7,500,000
Additional information:
1. The receivables turnover for 2014 is 10 times.
2. All sales are on account.
3. The profit margin for 2014 is 14.5%.
4. Return on assets is 20% for 2014.
5. The current ratio on December 31, 2014, is 3.0.
6. The inventory turnover for 2014 is 4.2 times.
Instructions
Compute the missing information given the ratios above. Show computations. (Note: Start with one ratio and derive as much information as possible from it before trying another ratio. List all missing amounts under the ratio used to find the information.)
45. A time-and-motion study revealed that it should take 3 hours to produce a product that currently...
A time-and-motion study revealed that it should take 3 hours to produce a product that currently takes 7 hours to produce. Labor is $9 per hour.
a) The non-value-added costs are
Mason company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. Bach, Inc., a competitor, keeps 10 days of inventory on hand, and the competitor's carrying costs average $2,000 per day.
b) The value-added costs.
46. P7-9 (Notes Receivable Journal Entries) On December 31, 2014, Oakbrook Inc. rendered services to ...
P7-9 (Notes Receivable Journal Entries) On December 31, 2014, Oakbrook Inc. rendered services to Beghun
Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four
equal installments of $20,000 receivable each December 31. An assumed interest rate of 11% is imputed.
Instructions
Prepare the entries that would be recorded by Oakbrook Inc. for the sale and for the receipts and interest
on the following dates. (Assume that the effective-interest method is used for amortization purposes.)
(a) December 31, 2014. (c) December 31, 2016. (e) December 31, 2018.
(b) December 31, 2015. (d) December 31, 2017.
47. Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars...
Selected financial data of two competitors, Target and Wal-Mart, are presented here. (All dollars are in millions.) Suppose the data were taken from the 2017 financial statements of each company
Instructions For each company, compute these values and ratios.
(a) Working capital.
(b) Current ratio.
(c) Debt to assets ratio.
(d) Free cash flow.
(e) Earnings per share.
(f) Compare the liquidity and solvency of the two companies.
48. Balance the following in acidic solution: (a) H2O2 +Sn2+ ? H2O+Sn4+ b) PbO2+Hg ? Hg22++Pb2+ c)...
Balance the following in acidic solution:
(a) H2O2 +Sn2+ ⟶ H2O+Sn4+
b) PbO2+Hg⟶Hg22++Pb2+
c) Al+Cr2O72− ⟶Al3++Cr3+
8.Balance the following in basic solution:
a)SO3 2−(aq) + Cu(OH)2(s) ⟶ SO4 2−(aq) + Cu(OH)(s)
b) O2(g) + Mn(OH)2(s) ⟶ MnO2(s)
c)NO3 −(aq) + H2(g) ⟶ NO(g)
d)Al(s) + CrO4 2−(aq) ⟶ Al(OH)3(s) + Cr(OH)4 −(aq)
16.Balance the following reactions and write the reactions using cell notation. Ignore any inert electrodes, as they are never part of the half-reactions.
(a) Al(s) + Zr4+(aq) ⟶ Al3+(aq) + Zr(s)
b) Ag+(aq) + NO(g) ⟶ Ag(s) + NO3 −(aq) (acidic solution)
(c) SiO3 2−(aq) + Mg(s) ⟶ Si(s) + Mg(OH)2(s) (basic solution)
d) ClO3 −(aq) + MnO2(s) ⟶ Cl−(aq) + MnO4 −(aq) (basic solution)
26. Determine the overall reaction and its standard cell potential at 25 °C for the reaction involving the galvanic cell made from a half-cell consisting of a silver electrode in 1 M silver nitrate solution and a half-cell consisting of a zinc electrode in 1 M zinc nitrate. Is the reaction spontaneous at standard conditions?
17.4 The Nernst Equation
36.Consider a battery made from one half-cell that consists of a copper electrode in 1 M CuSO4 solution and another half-cell that consists of a lead electrode in 1 M Pb(NO3)2 solution.
(a) What are the reactions at the anode, cathode, and the overall reaction?
(b) What is the standard cell potential for the battery?
(c) Most devices designed to use dry-cell batteries can operate between 1.0 and 1.5 V. Could this cell be used to make a battery that could replace a dry-cell battery? Why or why not.
(d) Suppose sulfuric acid is added to the half-cell with the lead electrode and some PbSO4(s) forms. Would the cell potential increase, decrease, or remain the same?
17.7 Electrolysis
50.How long would it take to reduce 1 mole of each of the following ions using the current indicated? Assume the voltage is sufficient to perform the reduction.
(a) Al3+, 1.234 A
(b) Ca2+, 22.2 A
(c) Cr5+, 37.45 A
(d) Au3+, 3.57 A
Chapter 18
6.The reaction of quicklime, CaO, with water produces slaked lime, Ca(OH)2, which is widely used in the construction industry to make mortar and plaster. The reaction of quicklime and water is highly exothermic: CaO(s) + H2 O(l) ⟶ Ca(OH)2(s) ΔH = −350 kJ mol−1
a) What is the enthalpy of reaction per gram of quicklime that reacts?
b) How much heat, in kilojoules, is associate with the production of 1 ton of slaked lime?
22. Why is it possible for an active metal like aluminum to be useful as a structural metal?
32. Write a Lewis structure for each of the following molecules and ions:
(a) (CH3)3SiH
(b) SiO4 4−
c) Si2H6
(d) Si(OH)4
(e) SiF6 2−
102. The following reactions are all similar to those of the industrial chemicals. Complete and balance the equations for these reactions:
(a) reaction of a weak base and a strong acid NH3+HClO4 ⟶
b) preparation of a soluble silver salt for silver plating Ag2CO3+HNO3 ⟶
c) preparation of strontium hydroxide by electrolysis of a solution of strontium chloride electrolysis SrCl2(aq) + H2 O(l) ⎯⎯⎯⎯⎯⎯⎯⎯⎯⎯⎯⎯→
49. n March 1, it was discovered that the following errors took place in journalizing and posting...
n March 1, it was discovered that the following errors took place in journalizing and posting transactions: a. Rent Expense of $4,650 paid for the current month was recorded as a debit to Miscellaneous Expense and a credit to Rent Expense. b. The payment of $3,700 from a customer on account was recorded as a debit to Cash and a credit to Accounts Payable. Journalize the entries on March 1 to correct the errors. Use two entries to correct the error described in (a). (That is, record an entry to reverse the incorrect entry and a second entry to record the correct entry.) Refer to the Chart of Accounts for exact wording of account titles.
50. Prisha has not kept accurate accounting records during the financial year. She had opening inventory
Prisha has not kept accurate accounting records during the financial year. She had opening inventory of $6,700 andpurchased goods costing $84,000 during the year. At the year end she had $5,400 left in inventory. All sales aremade at a mark up on cost of 20%.What is Prisha’s gross profit for the year?A $13,750B $17,060C $16,540D $20,675621 Exe Co acquired 70% of the ordinary share capital of Barle Co six years ago. The following information relates to BarleCo for the year ended 30 September 20X3.$Sales revenue 480,000Cost of sales 270,000Administration expenses 90,000Taxation 30,000What is the profit attributable to the non-controlling interest in the consolidated income statement?A $27,000B $63,000C $36,000D $84,000
