1) A used machine with a purchase price of $77,000, requiring an overhaul costing $8,000, installation costs of $5,000, and special acquisition fees of $2,000, would have a cost basis of _______.
2) Bonds Payable has a balance of $900,000 and Premium on Bonds Payable has a balance of $10,000. If the issuing corporation redeems the bonds at 102, what is the amount of gain or loss on redemption?
3) The net income reported on the income statement for the current year was $250,000. Depreciation recorded on fixed assets and amortization of patents for the year were $40,000 and $9,000, respectively. Balances of current asset and current liability accounts at the end and at the beginning of the year are as follows:
Accounts payable (merchandise creditors)
1. Cost is all amount spent in getting the machine ready for use. The cost is = 77,000+8,000+5,000+2,000 = 92,000
2. The carrying value of the ...
The solution explains some multiple choice questions relating to cost basis, bond redemption and cash flow from operating activities