***PLEASE ANSWER ALL QUESTIONS***

1. United Products. distributed 100 million coupons in 2021. The coupons are redeemable for 30 cents each. United anticipates that 70% of the coupons will be redeemed. The coupons expire on December 31, 2022. There were 45 million coupons redeemed in 2021 and 30 million redeemed in 2022. United recognizes coupon expense in the period coupons are issued.

What was United's coupon promotional expense in 2022?

A) Zero, since the entire coupon expense was recognized in 2021.

B) $1.5 million.

C) $7.5 million.

D) $9.0 million.

2. On January 1, 2021, Ace Corporation began offering a two-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2021 were $150 million. Fifteen percent of the units sold were returned in 2021 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Ace's 2021 income statement is:

A) $5.3 million.

B) $7.2 million.

C) $6.0 million.

D) $27.0 million.

3. Larry issues a bond that has a stated interest rate of 10%, face amount of $50,000, and is due in 5 years. Interest payments are made semi-annually. The market rate for this type of bond is 12%. What is the issue price of the bond? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

A) $83,920.

B) $46,320.

C) $53,605.

D) $50,000.

4. Interest expense is:

A) The effective interest rate times the amount of the debt outstanding during the interest period.

B) The stated interest rate times the amount of the debt outstanding during the interest period.

C) The effective interest rate times the face amount of the debt.

D) The stated interest rate times the face amount of the debt.