Marshall Enterprises issued $800,000 of 5-year, zero-coupon notes on January 1 when the market yield was 3% per semiannual period. The bond agreement stated that compounding was semiannual. The issue price of the notes was $595,275.

How much interest expense will the company report on its income statement during the first year?

Select one:

a. $47,280

b. $36,252

c. $35,181

d. $35,717

Which one of the following is an effect of using LIFO during periods of rising prices?

Select one:

A. Is best for GAAP reporting to shareholders

B. Most closely reflects the physical flow of goods for most businesses

C. Results in cost of goods sold closely approximating its market value

D. Results in higher profits than if FIFO were used

Which one of the following statements is not true about inventory management systems?

Select one:

A. Both periodic and perpetual inventory systems track the inventory cost in the inventory account on a continuing basis.

B. The inventory account is updated only at the end of the period under the periodic inventory system.

C. The cost of goods sold account is updated at each merchandise sale under a perpetual inventory system.

D. The inventory account is updated at every sale and at every merchandise purchase under the perpetual inventory system

Illini Supplies maintains its hand-held graphing calculator inventory using the perpetual inventory method. The inventory records for May follow:

Beginning inventory	20 units @ $105 each
May 12 purchase	30 units @ $120 each
May 20 sale	40 units @ $195 each
May 25 purchase	15 units @ $115 each

Using the weighted-average cost method, how much is the May 31 inventory on Illini Supplies balance sheet?

Select one:

a. $2,825

b. $2,650

c. $2,865

d. $1,725