Question
On January 1, 2016, the Washington Group issued $100,000 par value 5%, five-year bonds when the market rate of interest was 8%. Interest is payable
On January 1, 2016, the Washington Group issued $100,000 par value 5%, five-year bonds when the market rate of interest was 8%. Interest is payable annually on December 31. The following present value information is available:
| 5% | 8% |
Present value of $1 (n = 5) | 0.78353 | 0.68058 |
Present value of an ordinary annuity (n = 5) | 4.32948 | 3.99271 |
What amount is the value of the net bonds payable at the end of 2016?
$88,022
$90,064
$100,000
$110,000
24. General purpose external financial reporting of a corporation focuses primarily on the needs of which group?
A. Regulatory and taxing authorities.
B. Investors and creditors and their advisors.
C. The Board of Directors of the corporation.
D. The management of the corporation.
20. Goshen Company bought a copyright for $90,000 on January 1, 2012, at which time the copyright had an estimated useful life of 15 years. On January 5, 2015, the company determined that the copyright would expire at the end of 2016. How much should Goshen record retrospectively as the effect of change? A. $0. B. $12,000. C. $8,000. D. $14,400.
18. During the current year, Coleman Company had pretax accounting income of $45 million. Colemans only temporary difference for the year was rent received for the following year in the amount of $15 million. Coleman's taxable income for the year would be:
A. $30 million. B. $60 million. C. $50 million. D. $45 million.
On January 1, 2016, Caifeng Foods issued stock options for 40,000 shares to a division manager. The options have an estimated fair value of $5 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Caifengs stock price increases by 5% in four years. Caifeng Foods initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in each of the next four years? A. $10,000 B. $45,000 C. $50,000 D. No effect
On January 1, 2016, a companys new president was awarded a $200,000 bonus that would be paid out in two $100,000 installments in 2018 (year 3) and 2019 (year 4) of employment, contingent on employment through the year ending December 31, 2017. How much should the company expense for this bonus in 2017 and 2018?
$0 for 2017; $100,000 for 2018
$100,000 for 2017 and $0 for 2018
$100,000 for 2017 and $100,000 for 2018
$200,000 for 2017 and $0 for 2018
A company, upon initial recognition of an asset retirement obligation, should not take which of the following actions?
Allocate asset retirement cost to expense over the useful life of the related asset.
Measure the asset retirement cost at fair value.
Capitalize the asset retirement cost by increasing the carrying amount of the related asset.
Capitalize the asset retirement cost at its undiscounted cash flow value
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