quiz C-answer - Bonds

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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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This note was uploaded on 11/07/2010 for the course BBA 1023 taught by Professor Luoyi during the Spring '10 term at University of Macau.

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quiz C-answer - Bonds

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