Can someone answer my question in 15 mninutes?
1. (TCO B) Patton Company purchased $400,000 of 10% bonds of Scott Co. on January 1, 2011, paying $376,100. The bonds mature January 1, 2021; interest is payable each July 1 and January 1. The discount of $23,900 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity. For the year ended December 31, 2011, Patton Company should report interest revenue from the Scott Co. bonds of (Points : 5) $42,392. $41,409. $41,368. $40,000. Question 2.2. (TCO B) On October 1, 2010, Menke Co. purchased (to hold to maturity) 200, $1,000, 9% bonds for $208,000. An additional $6,000 was paid for accrued interest. Interest is paid semiannually on December 1 and June 1, and the bonds mature on December 1, 2014. Menke uses straight-line amortization. Ignoring income taxes, the amount reported in Menke's 2010 income statement from this investment should be (Points : 5) $4,500. $4,020. $4,980. $5,460. Question 3.3. (TCO B) On its December 31, 2010 balance sheet, Calhoun Company appropriately reported a $10,000 debit balance in its Securities Fair Value Adjustment (Available-for-Sale) account. There was no change during 2011 in the composition of Calhoun's portfolio of marketable equity securities held as available-for-sale securities. The following information pertains to that portfolio: Security Cost X Y Z $125,000 100,000 175,000 $400,000 Fair Value at 12/31/11 $160,000 95,000 125,000 $380,000 The amount of unrealized loss to appear as a component of comprehensive income for the year ending December 31, 2011 is (Points : 5) $30,000. $20,000. $10,000. $0. Question 4.4. (TCO B) On December 29, 2011, James Co. sold an equity security that had been purchased on January 4, 2010. James owned no other equity securities. An unrealized holding loss was reported in the 2010 income statement. A realized gain was reported in the 2011 income statement. Was the equity security classified as available for sale, and did its 2010 market price decline exceed its 2011 market price recovery? Available for Sale a b c d Yes Yes No No 2010 Market Price Decline Exceeded 2011 Market Price Recovery Yes No Yes No (Points : 5) a b c d Question 5.5. (TCO B) On December 31, 2010, Patel Co. purchased equity securities as trading securities. Pertinent data are as follows: Security A B C Cost $132,000 168,000 288,000 Fair Value at 12/31/11 $117,000 186,000 258,000 On December 31, 2011, Patel transferred its investment in Security C from trading to available for sale because Patel intends to retain Security C as a long-term investment. What total amount of gain or loss on its securities should be included in Patel's income statement for the year ended December 31, 2011? (Points : 5) $3,000 gain $27,000 loss $30,000 loss $45,000 loss
