You are also given the following information that list selectbusiness activities for the current year,2017

1. The company acquired as a long-term investment $1 million of 6% bonds, on March 1, 2017. Company management has the positive intent and ability to hold the bonds until they mature in 5 years on March 1, 2022. The market interest rate was 8% for the bonds and the company paid $918,891.04 for the bonds. The company will receive interest semiannually on August 31st and February 28th. As a result of changing market conditions, the fair value of the bonds at December 31, 2017 was $1,050,000. Required: a. Prepare the journal entry to record the investment in the bonds on March 1, 2017 b. Prepare the journal entry to record the interest payment received on August 31, 2017 using the effective (market) interest method c. Prepare the adjusting entry (if necessary) for the change in fair value of the bond at December 31, 2017

2. Reeves Incorporated buys and sells securities expecting to earn profits on short-term differences in price. They had the following transactions during 2017: April 1 Purchased 100,000 shares of Apple stock for $1,600,000 June 1 Received cash dividend of $20,000 from Apple Dec 31 The stock price of the Apple was $18.50 per share on December 31st. Required: Record the April 1st and June 1st transactions. Make any necessary adjusting entry at the end of the fiscal year December 31, 2017 due to the change in stock price

3. Reeves Incorporated pays employees monthly. Payroll information is listed below for August 2017. Salaries $500,000 Federal income taxes to be withheld $100,000 Federal unemployment tax rate .60% State unemployment tax rate 5.4% Social Security tax rate 6.2% Medicare tax rate 1.45% Required: Prepare the appropriate journal entries to record salaries and wages expense and payroll tax expense for the August 2017 pay period.

4. The Reeves Company issued 10% bonds, dated January 1, 2017 with a face amount of $8 million. The bonds mature on December 31, 2026 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30th and December 31st. Required: 1. Determine the price of the bonds at January 1, 2017 2. Prepare the journal entry to record their issuance on January 1, 2017 3. Prepare the journal entry to record interest on June 30, 2017 (at the effective rate) 4. Prepare the journal entry to record interest on December 31, 2017 (at the effective rate)

5. The information that follows pertains to the Reeves Company: 1. At December 31, 2017, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation $60,000 Prepaid expenses 17,000 Warranty expenses (12,000) 2. No temporary differences existed at the beginning of 2017. 3. Pretax accounting income was $80,000 and taxable income was $15,000 for the year ended December 31, 2017. 4. The tax rate is 40%. Required: Determine the amounts necessary to record income taxes for 2017 and prepare the appropriate journal entry.

6. Using the information from the balance sheet prepared the following ratios for 2016: a. Current Ratio b. Acid (Quick) Ratio c. Debt to Asset Ratio d. Debt to Equity Ratio

As a recently hired accountant for Reeves Incorporated., you are provided with last year's balance sheet to familiarize yourself with the business. Reeves Incorporated