Part 1: A company has net income of $885,000; its weighted-average common shares outstanding are 177,000. Its dividend per share is $1.10 and its market price per share is $101. Its price-earnings ratio equals:

Multiple Choice

• 4.40.

• 5.50.

• 20.20.

• 6.60.

• 19.10.

Part 2: On July 1, Shady Creek Resort borrowed $350,000 cash by signing a 10-year, 8.5% installment note requiring equal payments each June 30 of $53,343. What amount of interest expense will be included in the first annual payment?

Multiple Choice

• $35,000

• $29,750

• $326,407

• $23,593

• $53,343

Part 3: Chang Industries has bonds outstanding with a par value of $220,000 and a carrying value of $233,000. If the company calls these bonds at a price of $226,000, the gain or loss on retirement is:

Multiple Choice

• $6,000 gain.

• $7,000 loss.

• $13,000 gain.

• $6,000 loss.

• $7,000 gain.

Part 4: On January 1 of Year 1, Congo Express Airways issued $3,600,000 of 6% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,270,000 and the market rate of interest for similar bonds is 7%. The bond premium or discount is being amortized at a rate of $11,000 every six months. The amount of interest expense recognized by Congo Express Airways on the bond issue in Year 1 would be:

Multiple Choice

• $194,000.

• $216,000.

• $252,000.

• $238,000.

• $119,000.

Part 5: A company paid $33,800 to acquire 11% bonds with a $36,000 maturity value. The company intends to hold the bonds to maturity. The cash proceeds the company will receive when the bonds mature equal:

Multiple Choice

• $36,425.

• $39,960.

• $36,000.

• $33,800.

• $34,225.