Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1.) Annapolis Company purchased a $3,000, 7%, 8-year bond at 103 and held it to maturity. The straight line method of amortization is used for

1.) Annapolis Company purchased a $3,000, 7%, 8-year bond at 103 and held it to maturity. The straight line method of amortization is used for both premiums & discounts. What is the net cash received over the life of the bond investment?(all money received minus all money paid, round to nearest whole dollar)

2.) Big Company purchased Small Company for $1,200,000. Small Company had assets with a fair value $1,000,000, and liabilities with a fair value of $140,000. Use this information to determine the dollar value of goodwill? (round to nearest whole dollar)

3.) On January 2, 2018, All Good Company purchased 12,000 shares of the stock of Big Bad Company, and DID NOT obtain significant influence.The investment is intended as a long-term investment.The stock was purchased for $14 per share, and represents a 10% ownership stake.Big BadCompany made $475,000 of net income in 2018, and paid dividends to All Good Company of $7,500 on December 15, 2017.On December 31, 2017, Big Bad Company's stock was trading on the open market for $10.50 per share at the end of the year.Use this information to determine the unrealized gain or loss on the investment that should be reported at year end by All Good Company.If it is a loss, enter as a negative number.Round to nearestwholedollar.

4.) On January 2, 2018, All Good Company purchased 7,000 shares of the stock of Big Bad Company, and DID obtain significant influence.The investment is intended as a long-term investment.The stock was purchased for $17 per share, and represents a 30% ownership stake.Big BadCompany made $400,000 of net income in 2018, and paid dividends to All Good Company of $35,000 on December 15, 2018.Big Bad Company's stock was trading on the open market for $21 per share at the end of the year.Use this information to determine the book value of the investment that should be reported at year end by All Good Company. Round to nearest whole dollar.

5.) Allstar Company signed a $150,000 mortgage on July 1, 2018 for the purchase of their new garage building. The mortgage entailed equal monthly payments of $3,000 at the end of each month. The interest rate is 8.0% per year.How much interest expense will be paid on August 31, 2018? (Round your answer to the nearest whole dollar.)

6.) On January 2, 2018, Alpaca Company purchased 15,000 shares of the stock of Zebra Company, and did not obtain significant influence.The investment is intended as a long-term investment.The stock was purchased for $12 per share, and represents a 10% ownership stake.Zebra Company made $55,000 of net income in 2018, and paid dividends of 50 cents per share on December 15, 2017.On December 31, 2017, Zebra Company's stock was trading on the open market for $15 per share at the end of the year.Use this information to prepare the General Journal entry(ies) (without explanation) for January 2 purchase and the December 15 & 31, 2018 record of income & gain/loss. If no entry is required then write "No Entry Required.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

Students also viewed these Accounting questions