Question
Balance sheet and income statement data indicate the following: Bonds payable, 12% (due in 15 years)$1,180,208Income before income tax for year364,840Income tax for year109,452Interest payable33,000Interest
Balance sheet and income statement data indicate the following:
Bonds payable, 12% (due in 15 years)$1,180,208Income before income tax for year364,840Income tax for year109,452Interest payable33,000Interest receivable19,000Interest expense141,625
Based on the data presented above, what is the times interest earned ratio? (Round to two decimal places.)
a.1.80
b.2.58
c.3.58
d.0.80
The Designer Company issued 10-year bonds on January 1. The 8% bonds have a face value of $723,000 and pay interest every January 1 and July 1. The bonds were sold for $600,893 based on the market interest rate of 9%. Designer uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Designer should record interest expense (round to the nearest dollar) of
a.$28,920
b.$32,535
c.$27,040
d.$24,036
Assuming a 360-day year, when a $17,681, 90-day, 7% interest-bearing note payable matures, total payment will be
a.$1,238
b.$309
c.$17,990
d.$18,919
Hall Company sells merchandise with a one-year warranty. In the current year, sales consisted of 2,606 units. It is estimated that warranty repairs will average $16 per unit sold, and 30% of the repairs will be made in the current year and 70% in the next year. In the current year's income statement, Hall should show warranty expense of
a.$0
b.$41,696
c.$29,187
d.$12,509
On January 1, $883,000, 5-year, 10% bonds, were issued for $856,510. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the semiannual amortization amount is
a.$44,150
b.$5,298
c.$2,649
d.$26,490
Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31.
Gross payroll$19,131Federal income tax withheld$3,336Social security rate6%Federal unemployment tax rate0.8%Medicare rate1.5%State unemployment tax rate5.4%
Salaries Payable would be recorded in the amount of
a.$14,360.18
b.$13,174.05
c.$19,131.00
d.$14,608.88
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