Refer to the Simplified Funds Statement for a Period in Exhibit 5.15 on page 174. Ten of the lines in the statement are numbered. Line (2) should be expanded to say "Additions for Expenses and Other Charges Against Income Not Using Funds," and line (3) should be expanded to say "Subtractions for Revenues and other Credits to Income Not Producing Funds from Operations." Ignore the unnumbered lines in responding to the questions below.

Assume that the accounting cycle is complete for the period and that all of the financial statements have been prepared. Then it is discovered that a transaction has been overlooked. That transaction is recorded in the accounts and all of the financial statements are corrected. Define funds as working capital. For each of the following transactions, indicate which of the numbered lines of the funds statement is affected and by how much. Ignore income tax effects except where taxes are explicitly mentioned.

a Bonds are issued for \(\$ 100,000\) cash.

b Bonds with a fair market value of \(\$ 100,000\) are issued for a building.

c Bonds with a book value of \(\$ 100,000\) are retired for \(\$ 90,000\) cash.

d Bonds with a book value of \(\$ 100,000\) are called for \(\$ 105,000\) cash and retired.

e Interest expense on bonds is recorded using the effective-interest method. The bonds have a face value of \(\$ 100,000\) and a current book value of \(\$ 90,000\). The coupon rate is 8 percent, paid semiannually, and the bonds were originally issued to yield 10 percent, compounded semiannually.

f Interest expense on bonds is recorded using the effective-interest method. The bonds have a face value of \(\$ 100,000\) and a book value of \(\$ 105,000\). The coupon rate is 8 percent, paid semiannually, and the bonds were originally issued to yield 6 percent, compounded semiannually.

g Depreciation claimed on the tax return exceeds depreciation expense on the financial statements by \(\$ 10,000\). The income tax rate is 40 percent and pretax financial statement income is \(\$ 200,000\). An entry is made recording income tax expense.

h Warranty costs claimed on the tax return are less than warranty expense on the financial statements by \(\$ 5,000\). The income tax rate is 40 percent. An entry is made recording deferred income taxes. Estimated Warranty Liability is a current liability.

i Expense of \(\$ 25,000\) and payment of \(\$ 35,000\) on a financing lease is recognized. The expense consists of \(\$ 20,000\) amortization and \(\$ 5,000\) interest.

j Normal pension costs of \(\$ 30,000\) are recognized and funded.

\(\mathbf{k}\) Prior-service pension costs are amortized to expense in the amount of \(\$ 20,000\) and \(\$ 15,000\) of this amount funded with a cash payment.