Need help with these questions for Financial Accounting and Reporting CPA Review class.

Questions I Still Need Help With FAR Exam #1 1. Consider the following: A company issued $10,000,000 in bonds on January 1, 2011. The terms are: 10 year with interest paid semiannually. Refer to the following schedule. Payment Balance Cash Effective Interest Decrease in Balance Outstanding 11,487,747 1 400,000 344,632 55,368 11,432,379 2 400,000 342,971 57,029 11,375,350 3 400,000 341,261 58,739 11,316,611 What is the interest expense on the bonds in 2012? a. b. c. d. 800,000 680,759 342,961 none of the above 2. Buckeye Corporation adopted dollar-value LIFO on January 1, 2011, when the inventory value was $500,000 and the cost index was 1.0. On December 31, 2011, the inventory value at year-end costs was $535,000 and the cost index was 1.06. Buckeye would report a LIFO inventory of a. 504,717 b. 530,000 c. 505,000 d. 533,019 9. Eagle Company issued ten-year bonds at 96 during the current year. In the year-end financial statements, the discount should be: a. b. c. d. Added to bonds payable Included as an expense in the year of issue Deducted from bonds payable Reported as a deferred charge 11. Liddy Corp. began constructing a new warehouse for its operations during the current year. In the year Liddy incurred interest of $30,000 on a working capital loan, and interest on a construction loan for the warehouse of $60,000. Interest computed on the average accumulated expenditures for the warehouse construction was $50,000. What amount of interest should Liddy expense for the year? a. b. c. d. 30,000 40,000 90,000 140,000 13. Consider the following: A company exchanged some equipment and was classified as having commercial substance. Case One Case Two Book Value $75,000 $60,000 Fair Value $80,000 $56,000 Cash Received $12,000 $10,000 Referring to Case Two the company will record a gain or loss of how much? a. b. c. d. 4,000 gain 4,000 loss 10,000 loss None of the above 16. CPA Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. CPA would record this reduction by crediting accounts receivable and debiting: a. Sales b. Sales discounts c. Sales returns d. Sales allowances 18. In the current year, CPA Company reported warranty expense of $190,000 and the warranty liability account increased by $20,000. What were warranty expenditures during the year? a. 190,000 b. 170,000 c. 210,000 d. 0 20. Consider the following: A company exchanged some equipment and was classified as having commercial substance. Case One Case Two Book Value $75,000 $60,000 Fair Value $80,000 $56,000 Cash Received $12,000 $10,000 In Case One the company would record the new equipment at: a. 68,000 b. 63,750 c. 67,250 d. None of the above 22. On October 31, 2011, CPA Co. borrowed $16 million cash and issued a 7-month, noninterest-bearing note. The loan was made by The Finance Co. whose stated discount rate is 8%. CPA's effective interest rate on this loan is: FOR THIS QUESTION, WHICH OF THE FOLLOWING ARE CORRECT? MORE THAN ONE ANSWER MAY APPLY! a. More than the stated discount rate of 8% b. Less than the stated discount rate of 8% c. Equal to the stated discount rate of 8% d. Unrelated to the stated discount rate of 8% 23. Consider the following: A company issued $10,000,000 in bonds on January 1, year 1. The terms are: 10 year with interest paid semiannually. Refer to the following schedule. Payment Balance Cash Effective Interest Decrease in Balance Outstanding 11,487,747 1 400,000 344,632 55,368 11,432,379 2 400,000 342,971 57,029 11,375,350 3 400,000 341,261 58,739 11,316,611 What is the stated annual rate of interest on the bonds: a. 3% b. 4% c. 6% d. 8% 24. Which of the following is not a current liability? a. Accounts payable b. Interest due in 6 months on a 10 year note payable c. Accrued taxes payable d. All are current liabilities 29. CPA, Inc. exchanged equipment and $18,000 cash for similar equipment. The book value and the fair value of the old equipment were $82,000 and $90,000, respectively. Assuming that the exchange does not have commercial substance, CPA will record a gain/(loss) of how much? a. 26,000 gain b. 8,000 loss c. 8,000 gain d. No gain or loss 30. In a nonmonetary exchange of equipment, if the exchange has commercial substance, a gain is recognized if: a. The fair value of the equipment received exceeds the book value of the equipment received b. The book value of the equipment received exceeds the fair value of the equipment given up c. The fair value of the equipment surrendered exceeds the book value of the equipment given up d. None of the above is correct