3.The following information relates to XYZ Corporation for the year ended February 28, 2015.

General Ledger AccountBalanceBank Overdraft$101,000Mortgage Payable (long term portion)$537,000Income taxes payable$29,000Bonuses payable (to be paid March 15, 2015)$36,500Insurance premiums payable$11,000

What is XYZ Corporation's total long-term liabilities for the year ended February 28, 2015?

$141,000

$112,000

$714,500

$130,000

$101,000

4.On October 1, Year 1, Howell Stores, Inc. issues twenty-year, first mortgage bonds with a face value of $1,000,000. The proceeds of the issue are $1,060,000. The bonds bear interest at the rate of 10 percent per year, payable semiannually at April 1 and October 1. Howell Stores Inc. closes its books annually at December 31. Round amounts to the nearest dollar.

Assume that Howell Stores, Inc. uses the straight-line method to recognize interest expense. The amount of interest payable at Dec 31st of the first year is:

$50,000

None of the other alternatives are correct

$24,250

$25,000

$24,645

6.XYZ Corporation announces an offer to issue bonds with a $100,000 par value, an 6% annual contract rate with interest payable semi-annually, and with a six year life at a time when the market rate of interest is 6%

The bonds will be unsellable at these terms

The bonds will sell for less than par

The bonds will sell for more than par

The bonds will sell for par

None of the above

8.If the contract rate on the bond is 13% and the market interest rate at the time of sale is 12.2%, then the bond will sell at:

Discount

Par

Unable to answer with the data provided

Premium

Cannot be sold in the market

9.Which method is easier to compute?

straight-line method of accounting for interest expense on bonds

effective interest method of accounting for interest expense on bonds

None of the other alternatives are correct

All the three statements about bonds are correct

declining balance method of accounting for interest expense on bonds

5.5.If Ace Company and Deuce Company trade machines, Ace should set up the new machine

None of the above are correct statements

At zero since there was no cash paid

At fair market value unless the machines are deemed similar and there is no culmination of the earnings process

At the net book value of the machine given up

At the net book value of the machine given up