5196,000 10) If bonds @ B) S200.000 s with a face value of $200,000 are sold at par, the amount of C) S196,000 mount of cash proceeds is 192,157 '11) Which of the following concepts represents time value of money? A) the concept that money becomes obsolete over time B) the concept that money earns income over time C) the concept that money loses its purchasing power over time D) the concept that money can be converted into other currencies over time 12) If a bond's stated interest rate is lower than the market rate which of the following is A) The bond will be issued at a premium. B) The bond will be issued at par C) The bond will be issued at a discount. D) The bond will be issued for an amount higher than the maturity value BC 13) Which of the following statements is true if a bond is sold for an amount higher than face value? A) The bond's stated rate is lower than the prevailing market rate at time of sale. B) The bond's stated rate is the same as the prevailing market rate at time of sale. C) The bond's stated rate is higher than the prevailing market rate at time of D) The bond is not secured by specific assets of the issuer 00 for rs ace 14) Why would a corporation issue bonds payable instead of issuing stock? A) Debt is a less expensive source of capital than stock. B) Borrowing by issuing bonds payable carries no risk to the company. C) Debts affect the percentage of ownership of the corporation by the stockholders. D) Debts don't carry any cost. $36,000 of 8% bonds that mature in five years for SAS,000. The bonds pay semiannual interest payments on June 30 and December 31 of each year. On December 31,2015, what is the total interest paid to bondholders? A) $1,440 B) $2,880 C) $1,800 D) $3,600 15) On June 1, 2015, Smith & Beecham Services issued 16) The balance in the Bonds Payable account is a credit of $65,500. The balance in the Discount on account is a debit of $2,150. How much is the bond's carrying amount? A) $2,150 is a credit of $65,500. The balance in the Discount on Bonds Payable B) $67,650 C) 565,500 D) S63,350 $2,350. On the balance sheet, how will this information be shown? A) $89,000 less Discount of $2.350 for a Net Balance of$86,650 B) $89,000 plus Discount for a total balance of $91,350 C) $89,000 D) $89,000 less one-tenth of $2,350 for a Net Balance of $88,76 17) On December 31, 2013, Clark Sales has a Bonds Payable Balance of $89,000 and a Discount on Bonds Payable 18) The balance in the Bonds Payable Account is a credit of $68,000. The balance in the Premium om Account is a credit of $900. How much is the bond carrying amount? A) $900 B) $68,900 C) $68,000 D) $67,100 Bonds Payable 19) On January 1,2015, Carter Sale issued $15,000 in bonds for $15,800 They were &-year boeds with a sated mate of 9%, and pay semiannual interest. 30, 2015, when Carter makes the first payment to bondholders, how A) $625 B) $675 C) $275 D) $280 Carter Sales uses the straight-line method to amortize the bond premium.OaJ much will they report as Interest Expense? une 20) On November 1, 2014, Archangel Services issued $300,000 of 8-year bonds with a stated rate of 9% at par. The bonds make semiannual payments on April 30 and October 31. On December 31, 2014, Archangel made an adjusting entry to accrue interest at year-end. How much Interest Expense will be recorded at December 31, 2014? A) $27,000 B) $4,500 C) $13,500 D) S14,200 21) On November 1, 2014, Archangel Services issued $300,000 of 5-year bonds with a stated rate of 10%. The bonds were sold at par, and Archangel makes semiannual payments on April 30 and October 31. On December 31, 2014, Archangel made an adjusting entry to accrue interest at year-end. No further entries were made until April 30, 2015, when the first payment was sent out. How much interest expense was recorded for the period of Jamuary 1 to April 30, 2015? A) $10,000 B) $30,000 C) $15,000 D) $24,000 22) One of the purposes of the statement of cash flows is to A) determine the worth of the accounts receivable of the business B) to calculate the turnover of inventory C) evaluate the level of debt and leverage of a company D) predict the ability of a company to pay debts and dividends A) It includes cash transactions that essentially increase or decrease the long-term assets of a business. B) It includes cash transactions affecting the capitalization of the business. C) It includes cash transactions that primarily affect current assets and current liabilities. D) It shows the beginning and ending balances of cash. 23) Which of the following describes the operating activitisecion often f A) It includes increases and decreases in long-term assets B) It includes cash transactions affecting the long-term liabilities and equity of the business. 24) Which of the following describes the financing activities section of the statement of cash flows? C) It includes transactions that primarily affect current D) It shows the beginning and ending balances of assets and current liabilities. cash decrease in long-term assets section of the statement of cash flows includes increase and dee 25) The A) investing activities B) financing activities C) operating activities D) non-cash operating activities RADE OR 26) Which of the following statements is true of the direct and indirect methods of preparing the statement of cash flows? A) The indirect method and the direct method will produce the same amount of net cash flow from operating ties B) The investing activities section is the only section that differs between the direct and indirect methods. C) The indirect method shows three types of cash flows, but the direct method does not. D) The operating activities section of both the direct and the indirect methods are the same 27) Which of the following statements is true? A) The indirect method and the direct method will produce a different amount of net cash activities flow from investing B) I he indirect method begins with net income and adjusts it to net operating cash flows. C) The direct and indirect methods include different types of cash flows in the investing activities section D) The indirect method includes all non-cash activities, whereas the direct method includes only the cash activities 28) Which of the following items is a measure of a company's ability to collect receivables? A) inventory turnover ratio B) current ratio C) days' sales in receivables D) account receivable balance 29) e-Shop Inc. has net sales on account of $1,200,000. The average net accounts receivable are $600,000. Calculate the days' sales in receivables. A) 439.8 days B) 304.0 days C) 182.5 days D) 8.7 days 30)) Zebra Inc. cost of goods sold for the year is $1,900,000 S129,000. Calculate the inventory turnover ratio of the company A) 16.78 times B) 14.73 times C) 33.8 times D) 65.5 times and the average merchandise inventory for the year is 31) Which of the following accurately describes working capital? A) Current assets minus merchandise inventory B) Current assets minus current liabilities C) Total debt minus stockholders' equity D) Cost of goods sold divided by average merchandise inventory 32) Nobell Inc. provides the following data: ash Accounts Receivable, Nt Merchandise Inventory 25 53 Property, Plant, and Equipment, Net Total assets