1.On November 1, 2014, Hamilton Company purchased Langley, Inc., 10-year, 9%, bonds with a face value of $600,000, for $540,000. An additional $15,000 was paid for the accrued interest. Interest is payable semiannually on January 1 and July 1. The bonds mature on July 1, 2021. Hamilton uses the straight-line method of amortization. Ignoring income taxes, the amount reported in Hamilton's 2014 income statement as a result of Hamilton's available-for-sale investment in Langley was

$9,000

$10,000

None of these answers are correct

$8,000

$10,500

2.The accounting for compensation expense related to stock options depends on the accounting method used. Under the intrinsic value method, compensation expense resulting from an incentive stock option is

allocated to the periods benefited by the employee's required service.

none of these answers are correct

recognized in the period of the grant.

recognized in the period of exercise.

not recognized if the market price does not exceed the option price at the date of grant.

3The following information is available for A Company: January 1, 2015 Shares outstanding 2,000 April 1, 2015 Shares issued 320,000 July 1, 2015 Treasury shares purchased 120,000 October 1, 2015 Shares issued in a 100% stock dividend 2,200 The number of shares to be used in computing earnings per common share for 2015 is

5,360,000

2,730,000

none of these answers are correct

4,380,000

4,520,800