21]

On January 1 of Year 1, Drum Line Airways issued $3,770,000 of par value bonds for $3,440,000. The bonds pay interest semiannually on January 1 and July 1. The contract rate of interest is 7% while the market rate of interest for similar bonds is 8%. The bond premium or discount is being amortized at a rate of $11,000 every six months. The company's December 31, Year 1 balance sheet should reflect total liabilities associated with the bond issue in the amount of:

A $3,462,000.

B $3,593,950.

C $4,078,000.

D $3,330,050.

E $4,209,950.

22]

On November 12, Kendra, Inc., a U.S. Company, sold merchandise on credit to Nakakura Company of Japan at a price of 1,590,000 yen. The exchange rate was $.00846 per yen on the date of sale. On December 31, when Kendra prepared its financial statements, the exchange rate was $.00852. Nakakura Company paid in full on January 12, when the exchange rate was $.00870. On December 31, Kendra should prepare the following journal entry:

A Debit Sales $95; credit Foreign Exchange Gain $95.

B Debit Foreign Exchange Loss $95; credit Sales $95.

C Debit Accounts Receivable-Nakakura Company $95; credit Foreign Exchange Gain $95.

D Debit Foreign Exchange Loss $95; Accounts Receivable-Nakakura Company $95.

E No journal entry is required until the amount is collected.

23]

Hamilton Company owns 88,200 of Hennie Company's 180,000 outstanding shares of common stock. Hennie Company pays $30,000 in total cash dividends to its shareholders. Hamilton's entry to record this transaction should include a:

A Credit to Long-Term investments for $14,700.

B Credit to Dividend Revenue for $30,000.

C Debit to Interest Revenue for $14,700.

D Credit to Long-Term Investments for $30,000.

E Debit to Dividend Revenue for $14,700.

24]

Refer to the following selected financial information from Fennie's, LLC. Compute the company's working capital for Year 2.

	Year 2	Year 1
Cash	$ 37,700	$ 32,450
Short-term investments	92,000	61,000
Accounts receivable, net	86,500	80,500
Merchandise inventory	122,000	126,000
Prepaid expenses	12,300	9,900
Plant assets	389,000	339,000
Accounts payable	112,400	108,800
Net sales	712,000	677,000
Cost of goods sold	391,000	376,000

A $225,800.

B $146,100.

C $116,100.

D $238,100.

E $151,600.

25]

In preparing a company's statement of cash flows for the most recent year, the following information is available:

Loss on the sale of equipment	$ 15,700
Purchase of equipment	162,000
Proceeds from the sale of equipment	143,000
Repayment of outstanding bonds	95,500
Purchase of treasury stock	70,500
Issuance of common stock	104,500
Purchase of land	132,000
Increase in accounts receivable during the year	51,500
Decrease in accounts payable during the year	83,500
Payment of cash dividends	43,500

Net cash flows from investing activities for the year were:

A $135,300 of net cash used by investing activities.

B $151,000 of net cash used by investing activities.

C $246,500 of net cash provided by investing activities.

D $151,000 of net cash provided by investing activities.

E $286,000 of net cash used by investing activities.

26]

A company had net cash flows from operations of $105,000, cash flows from financing of $370,000, total cash flows of $406,000, and average total assets of $2,800,000. The cash flow on total assets ratio equals:

A 3.95%.

B 25.86%.

C 13.21%.

D 3.75%.

E 14.50%.

27]

A corporation reported cash of $14,200 and total assets of $178,500. Its common-size percent for cash equals:

A 7.96%.

B 5.96%.

C 14.73%.

D 20.69%.

E 12.57%.

28]

On February 15, Seacroft buys 7,100 shares of Kebo common at $28.54 per share plus a brokerage fee of $405. The stock is classified as available-for-sale securities. On March 15, Kebo declares a dividend of $1.16 per share payable to stockholders of record on April 15. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.31 per share less a brokerage fee of $255. The fair value of the remaining shares is $29.51 per share. The amount that Seacroft should report in the asset section of its year-end December 31 balance sheet for its investment in Kebo is:

A $2,276.

B $104,760.

C $5,580.

D $203,039.

E $3,241.

29]

On February 15, Seacroft buys 7,800 shares of Kebo common stock at $28.61 per share plus a brokerage fee of $440. The stock is classified as available-for-sale securities. On March 15, Kebo declares a dividend of $1.23 per share payable to stockholders of record on April 15. Seacroft received the dividend on April 25 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.38 per share less a brokerage fee of $290. The journal entry to record the purchase on February 15 is:

A Debit Long-Term Investments-AFS $223,598; credit Cash $223,598.

B Debit Long-Term Investments-AFS $223,158; credit Cash $223,158.

C Debit cash $223,598; credit Long-Term Investments-AFS $223,598

D Debit cash $223,158; credit Long-Term Investments-AFS $223,158.

E Debit Long-Term Investments-AFS $229,164; credit cash $229,164

30]

On February 15, Seacroft buys 6,200 shares of Kebo common at $28.71 per share plus a brokerage fee of $485. The stock is classified as available-for-sale securities. On March 15, Kebo declares a dividend of $1.23 per share payable to stockholders of record on April 15. Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.48 per share less a brokerage fee of $340 . The fair value of the remaining shares is $29.68 per share. The amount that Seacroft should report in the equity section of its year-end December 31 balance sheet for its investment in Kebo is (Round your intermediate and final dollar values to the nearest dollar amount):

A $9,430.

B $7,626.

C $1,804.

D $2,764.

E $5,529.