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ANSWERS TO QUIZ C 1-5 AECDE 6-10BAAAE 11-15CEACE PROBLEM 1. 2. (1)\$231,000 \$500,000-\$23,000=477 ,000 \$477,000+net income\$72,000-cash dividend\$278,000-stock dividend\$40,000=\$231,000 (2) Statement of Retained earnings for the year 2010 Retained earnings, December 31, 2009…………………………. .\$500,000 Less: correction of overstatement of the net income in 2009…….\$23,000 Retained earnings , adjusted……………………………………….\$477,000 Add: Net income…………………………………………………. ..\$72,000 Less: Cash dividend……………………………………………… \$27,800 Stock dividend………………………………………………\$40,000 Retained earnings ,December 31,2010…………………………. .…\$481,200 3. \$35,000*0.9091+25,000*0.8264+15,000*0.7513 =31,818.5+20660+11,269.5=63,748 4.(a)2009.1.1

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Unformatted text preview: Bonds payable…………………………………….3,500,000 Premium on bonds payable……………………… 784,000(4284000-3500000) (b)each semiannual period, the cash payment=3,500,000*8%/2=140,000 the straight-line discount amortization=784,000/15/2=26133.33=26,133 the bond interest expense=cash payment –discount amortization=140,000-26133=113,867 (c)total interest expense=3500,000*8%*15-(4284000-3500000)=4200,000-784,000=3416,000 (e) .June 30, interest expense…………………………….113867 Premium on bonds payable…………………26,133(784,000/15/2) cash ………………………………140,000(3500,000*8%/2) Dec 31 interest expense……………………………. 113867 Premium on bonds payable…………………26,133(784,000/15/2) cash ………………………………140,000(3500,000*8%/2)...
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