Ch10 - Student Name: Class: Problem 10-08 ELECTROLUX...

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Student Name: Class: Problem 10-08 ELECTROLUX CORPORATION Requirement 1: Bond Issue Price Principal: Interest: Bond issue price Why are both stated and effective-interest rates used? Requirement 2: Straight-line Amortization 2011 2012 2013 2014 2015 Cash interest payment Amortization of discount Bond interest expense Requirement 3: Bond Payment Schedule Cash Interest Amortization Net Date Payment Expense of Discount Liability 1/1/2011 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/20115 *Note: The rounding function is not used in these calculations, but \$35 must be added into the formula used for year 2015 interest to make up for rounding errors. Explanation of constant interest rate: Requirement 4: Which amortization method should be used? Which method is preferred? Why?

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Given Data P10-08: ELECTROLUX CORPORATION Maturity (par) value \$800,000 Interest rate 8% Maturity date Dec. 31, 2015 Effective-interest rate when sold: 12%
Student Name: Class: Problem 10-09 VIGELAND CORPORATION Requirement 1: Computations Interest Present value: Principal Interest Issue price Requirement 2: December Interest expense June 30 31 Requirement 3: December Cash paid June 30 31 Requirement 4: December Bonds payable June 30 31

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Given Data P10-09: VIGELAND CORPORATION Maturity (par) value \$2,000,000 Stated interest rate 10% Maturity date Dec. 31, 2019 Market rate when sold: 8%
Student Name: Class: Problem 10-12 MBTA CORPORATION Bond Amortization Schedule (amounts in thousands) Requirement 1: Date Cash Interest Amortization Balance January 1, 2011 \$48,808 End of year 2011 \$3,600 \$3,417 \$183 48,625 End of year 2012 3,600 48,429 End of year 2013 3,600 End of year 2014 3,600 48,000 Note: Add \$6 to 2012 interest for rounding error Requirement 2: Maturity amount of bonds Requirement 3: Cash received at date of bond issuance Requirement 4: Was there a premium or discount? How much? Requirement 5: Cash disbursed for interest each period: Cash disbursed for interest during full life: Requirement 6: Method of amortization and explanation: Requirement 7: Stated rate of interest: Requirement 8: Effective rate of interest: Requirement 9: Annual interest expense: 2011 2012 2013 2014 Requirement 10: Balance sheet: Long-Term Liabilities 2011 2012 2013 2014 Bonds payable, 7.5% Maturity amount \$48,000, plus unamortized premium

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Given P10-12: MBTA CORPORATION Bond Amortization Schedule (amounts in thousands) Date Cash Interest Amortization Balance January 1, 2011 \$48,808 End of year 2011 \$3,600 \$3,417 \$183 48,625 End of year 2012 3,600 ? ? 48,429 End of year 2013 3,600 ? ? ? End of year 2014 3,600 ? ? 48,000
CP10-3 Comparing Companies within an Industry Required: 1. 2. This workbook is organized as follows: Sheet Name Contents CP10-3 (this worksheet) CP10-3 Problem Requirements and Workbook Layout Industry Ratio Report American Eagle Outfitters, Inc. Consolidated Balance Sheets American Eagle Outfitters, Inc. Consolidated Statements of Operations American Eagle Outfitters, Inc. Consolidated Statements of Stockholders' Equity

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This note was uploaded on 11/05/2011 for the course AEM 2210 at Cornell University (Engineering School).

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Ch10 - Student Name: Class: Problem 10-08 ELECTROLUX...

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