1. Cech Corporation issued $800,000 of 8% bonds on October 1, 2010, due on October 1, 2015. The interest is to be paid once a year on October 1. The bonds were sold to yield 10% effective annual interest. Cech Corporation closes its books annually on December 31. On October 1, 2010, Cech will receive:

a) $800,000

b) $778,653

c) $759,616

d) 739,347

2) Cech Corporation issued $800,000 of 8% bonds on October 1, 2010, due on October 1, 2015. The interest is to be paid once a year on October 1. The bonds were sold to yield 10% effective annual interest. Cech Corporation closes its books annually on December 31. On December 31, 2010, Cech will:

a) credit Bonds Payable for $18,484

b) credit Interest Payable for $18,484

c) debit Interest Expense for $16,000

d) credit Discount on Bonds payable for $2,484

3) Xavi Company had 2,400 units of Product B in its inventory at a cost of $7 each. It purchased 600 more units of Product B at a cost of $9 each. Xavi then sold 1,700 units at a selling price of $15 each. The tax rate for Xavi is 35 percent. The effect of LIFO liquidation on Xavi's net income is:

a) Overstatement of $1,430

b) Overstatement of $2,200

c) Overstatement of $2,520

d) Overstatement of $3,350

4) The following information about the cost and market value of Neymar's ending inventory is available:

Cost Market Value

12/31/2010 $320,000 $303,000

12/31/2011 282,000 276,000

The entry at 12/31/2011 necessary to implement the lower-of-cost-or-market procedure (assuming Neymar uses a contra account for its balance sheet) includes:

a) a loss of $17,000.

b) a loss recovery of $6,000.

c) a loss of $6,000.

d) a loss recovery of $11,000