Answered step by step
Verified Expert Solution
Question
1 Approved Answer
27. A cash equivalent must be ready convertible to a known amount of cash, and must be sumiciently close to its maturity so its market
27. A cash equivalent must be ready convertible to a known amount of cash, and must be sumiciently close to its maturity so its market value is unaffected by interest rate changes 28. Financing activities include (a) the purchase and sale of long-term assets. (b) the purchase and sale of short-term investments and (c) lending and collecting on loans 29. Receipts of cash dividends and interest earned on loans are classified as investing activities. 30. A purchase of land in exchange for a long-term note payable must be disclosed as a noncash investing and financing activity. (12 points) Calculate the percent increase or decrease for each of the following financial statement items using Year 1 as the base year: Year 2 Cash $37,500 Accounts receivable 63,000 Inventory 67,500 Accounts payable Sales 187,500 Equipment 165,000 Year 1 $30,000 52,500 90,000 27,000 150,000 125,000 (6 points) A company issued 10-year, 7% bonds with a par value of $100,000. The company received $96,526 for the bonds. Using the straight-line method, the amount of interest expense for the first semiannual interest period is: a. $3,326.00 b. $3,500.00 c. $3,673.70 d. $7,000.00 e. $7,347.40 NOTE: Circle the correct answer above on the test page (6 points) Adonis Corporation issued 10-year, 8% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 7.5%. Adonis received $206,948 in cash proceeds. Which of the following statements is true? a. Adonis must pay $200,000 at maturity and no interest payments b. Adonis must pay $206,948 at maturity and no interest payments c. Adonis must pay $200,000 at maturity plus 20 interest payments of $8,000 each d. Adonis must pay $206.948 at maturity plus 20 interest payments of $8,000 each e. Adonis must pay $200,000 at maturity plus 20 interest payments of $7,500 each NOTE: Circle the correct answer above on the test page. Page 5 of 6
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started