Question1: Explain the reason for which a stock split is done. Mention two advantages of stock split.

Question 2: What is the purpose of Depreciation Expense account and Accumulated Depreciation account? Explain what normal balance for these accounts is.

Question 3: An equipment was acquired at a cost of $500,000. The estimated residual value of $50,000 and the useful life for the equipment is of 10 years. Compute the double-declining balance rate and the depreciation balance for first year.

Question 4: 4: A company issues bond for $2,350,000, there is an unamortized discount of $100,000 on this. The bond is redeemed at $1,750,000. Provide journal entries for the redemption of bonds.

Question 5: The information for a company is as follows: Particulars Amount (in $) Revenue 600,000 Cost of goods sold 375,000 Gross Profit 225,000 Administrative expenses 55,000 Depreciation 35,000 Other expenses 6,500 Net profit before taxes 128,500 Income tax expense 3,500 Net profit 125,000

Compute the cash flow from operating activities with the use of direct method.