Marine City Company sells bags of coffee. Each bag includes one coupon; five coupons (plus $3.00) are redeemable for a personalized coffee mug. In 2017, Marine City purchased 9,000 mugs at $4.20 each and sold 60,000 bags of coffee that year at $6.00 per bag. Marine City estimated that 50% of the coupons would be redeemed. Actual coupons redeemed were 8,000 in 2017 and 13,000 in 2018.

1.The estimated liability for outstanding premiums on the12/31/17balance sheet is:

Select one:

a.$18,480

b.$7,200

c.$4,400

d.$5,280

2.On January 1, 2014, Bear Cove Co. issued its 11% bonds in the face amount of $3,000, which mature on January 1, 2024. The bonds were issued for $3,385 to yield 9%. Bear Cove uses the effective-interest method of amortizing the bond premium. Interest is payable annually on December 31.

The 12/31/14 bond carrying value is approximately:

Select one:

a.$3,387

b.$3,410

c.$3,385

d.$3,332

e.$3,360

3.On July 1, 2015, Burdick Co. issued bonds with a face value of $600,000. The bonds carry a stated interest rate of 8%; interest is payable each June 1st and December 1st. The bonds were issued at 103 plus accrued interest. The straight-line method is used. The bonds mature on 6/1/18. What was the total cash received on 7/1/15?

Select one:

a.$622,000

b.$614,000

c.$620,000

d.$638,000

e.$618,000