7 5 pts On March 31, 2015, Armstrong Company paid $2,500,000 cash to acquire all of the common stock of Hall Corporation, which became a division of Armstrong. Hall reported the following balance sheet items at the time of the acquisition: A/R 100,000 1,800,000 Inventory PP&E 2,500,000 Note Payable 200,000 Bond Payable 500,000 At the time of the acquisition, Armstrong identified an unrecorded patent that Hall had developed with an approximate fair value of $100,000. The recorded amount for Hall's remaining net assets is the same as fair value, except for property, plant, and equipment, which has a fair value of $250,000 above the carrying value and Inventory which has a fair value of $50,000 below the carrying value. What is the journal entry that Armstrong will record at the time of the acquisition? Question 8 4 pts Builder Inc. enters into a contract to build a house for XYZ, Inc. on 4/1/2016 for $500,000. The terms of the contract requires that the building be completed by 3/31/2017, and offers a $50,000 bonus if the building is completed by 3/1/2017. Based on past experience, Builder Inc. is 65% confident that will be able to make the 3/1/2017 deadline and receive the bonus. Builder, Inc. records revenue evenly over the construction of the building. What is the contract amount that XYZ, Inc. should use in determining revenue recognition? Question 9 3 pts Builder Inc. enters into a contract to build a house for XYZ, Inc. on 4/1/2016 for $500,000. The terms of the contract requires that the building be completed by 3/31/2017, and offers a $50,000 bonus if the building is completed by 3/1/2017. Based on past experience, Builder Inc. is 65% confident that will be able to make the 3/1/2017 deadline and receive the bonus. Builder, Inc. records revenue evenly over the construction of the building. How much revenue will Builder Inc. record in 2016 related to this project? Question 10 4 pts On January 1, 2012 ABC, Inc. issued 1,000 10-year bonds (par value of $1,000 each), with a 5% coupon rate, and interest paid semiannually (twice a year). The first payment is scheduled to occur on June 30th. At the time of the bond issuance, the market rate for a similar debt security was currently yielding 6%. Overall interest rates increase over the first 18 months of the bonds life, and the market is now (7/1/2013) demanding an interest rate of 8%. What is the journal entry that ABC, Inc. would record on 1/1/2012? Question 11 4 pts On January 1, 2012 ABC, Inc. issued 1,000 10-year bonds (par value of $1,000 each), with a 5% coupon rate, and interest paid semiannually (twice a year). The first payment is scheduled to occur on June 30th. At the time of the bond issuance, the market rate for a similar debt security was currently yielding 6%. Overall interest rates increase over the first 18 months of the bonds life, and the market is now (7/1/2013) demanding an interest rate of 8%. If ABC, Inc. decides to retire the bond early by purchasing it back via the bond market on July 1, 2013, how would they account for this transaction (assume they retire the bond for cash, and the bonds have an unrestricted call feature)