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Market price of Bond

17. The basis for classifying assets as current or noncurrent is the

period of time normally required by the accounting entity to convert

cash invested in

a. inventory back into cash, or 12 months, whichever is shorter.

b. receivables back into cash, or 12 months, whichever is longer.

c. tangible fixed assets back into cash, or 12 months, whichever is

longer.

d. inventory back into cash, or 12 months, whichever is longer.

18. The owners' equity section is usually divided into what three parts?

a. Preferred stock, common stock, treasury stock

b. Preferred stock, common stock, retained earnings

c. Capital stock, additional paid-in capital, retained earnings

d. Capital stock, appropriated retained earnings, unappropriated

retained earnings

19. In preparing a statement of cash flows, which of the following

transactions would be considered an investing activity?

a. Sale of equipment at book value

b. Sale of merchandise on credit

c. Declaration of a cash dividend

d. Issuance of bonds payable at a discount

20. Which table would you use to determine how much you would need to

have deposited three years ago at 10% compounded annually in order

to have $1,000 today?

a. Future value of 1 or present value of 1

b. Future value of an annuity due of 1

c. Future value of an ordinary annuity of 1

d. Present value of an ordinary annuity of 1

21. The market price of a $200,000, ten-year, 12% (pays interest semi-

annually) bond issue sold to yield an effective rate of 10% is

a. $224,578.

b. $224,925.

c. $226,654.

d. $374,472.

22. All of the following costs should be charged against revenue in the

period in which costs are incurred EXCEPT for

a. manufacturing overhead costs for a product manufactured and sold

in the same accounting period.

b. costs which will not benefit any future period.

c. costs from idle manufacturing capacity resulting from an

unexpected plant shutdown.

d. costs of normal shrinkage and scrap incurred for the manufacture

of a product in ending inventory.

Solution Preview

17. The basis for classifying assets as current or noncurrent is the

period of time normally required by the accounting entity to convert

cash invested in

c. tangible fixed assets back into cash, or 12 months, whichever is

longer.

18. The owners' equity section is usually divided into what three parts?

c. Capital stock, additional paid-in capital, retained earnings

19. In preparing a ...

Solution Summary

Response provides the steps to compute the market price of Bond

$2.19