1. On January 1, 2019, Zero Corporation obtained a $52,000, 4-year, 6.5% instalment note payable from Regional Bank. The note requires annual payments consisting of $15,179 ( principal and interest ) beginning on December 31^st, 2019. The December 31^st, 2019 principal balance ( after the first payment ) will be equal to:

1. $27,635
2. $36,821
3. $40,201
4. $48,620

2. ABC Company has the following balance sheet and income statement data at December 31^st, 2019:

Bonds Payable, 8% ( contractual rate and market rate )

maturity date December 31^st, 2023 $1,200,000

$8 Preferred Shares ( no change during the year ) 200,000

Common Shares ( no change during the year ) 1,000,000

Profit before income tax expense for the year 320,000

Income tax expense for the year 80,000

Common share dividends paid during the year 60,000

Preferred share dividends paid during the year 16,000

Based on the above data, what is the interest coverage ratio at December 31^st, 2019 ( round to two decimal places )?

1. 5.67
2. 4.33
3. 3.50
4. 3.24

3. Halprin Corporation issues $1,000,000, 4%, 10-year bonds that pay interest annually when the market rate of interest is 6%. What is the issue price of the bonds?

1. $882,826
2. $969,964
3. $852,794
4. $1,000,000

4. Which of the following is a characteristic of a general partnership?

1. The partners have co-ownership of partnership property
2. Partnership profit is taxed as a separate entity
3. The partnership has an unlimited life
4. The partners have limited liability

5. Singer and McMann are partners in a business. Singers capital at the beginning of the year was $40,000 and McManns was $60,000. They agreed to yearly salaries of $12,000 for Singer and $18,000 for McMann. They each receive 10% interest on their capital balances at the beginning of the year. The remaining profit or loss is allocated on a 3:2 basis between Singer and McMann.

If profit for the year is $30,000, what is the amount allocated to McMann?

1. $20,000
2. $18,600
3. $18,000
4. $17,400