ACCT 301B Spring 2009 Midterm A

ACCT 301B Spring 2009 Midterm A - ACCT 301B Spring 2009...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ACCT 301B Spring 2009 Midterm Examination; Closed books and notes; no scrap paper; no programmable calculators or other devices; assigned seats. 1. The effective interest on a 12-month, zero-interest-bearing note payable of $400,000, discounted at the bank at 9% is ____________________________ (show to two decimal places: xx.xx%) Required: Show your supporting computations below to receive credit for correct answers. 36,000 / (400,000 36,000) = 36,000 / 364,000 = 9.89% Professor Paul Sheldon Foote, California State University, Fullerton 1 ACCT 301B Spring 2009 Midterm Examination; Closed books and notes; no scrap paper; no programmable calculators or other devices; assigned seats. 2. During 2006, Younger Co. introduced a new line of machines that carry a three- year warranty against manufacturers defects. Based on industry experience, warranty costs are estimated at 2% of sales in the year of sale, 4% in the year after sale, and 8% in the second year after sale. Sales and actual warranty expenditures for the first three-year period were as follows: Sales Actual Warranty Expenditures 2006 $ 600,000 $ 9,000 2007 1,500,000 45,000 2008 2,100,000 135,000 $4,200,000 $189,000 What amount should Younger report as a liability at December 31, 2008? $_____________________________________________________________________ Required: Show your supporting computations below to receive credit for correct answers. 600,000 * 12 % = 72,000 1,500,000 * 12% = 180,000 2,100,000 * 12% = 252,000 Estimated Liability = 504,000 Actual Expenditures = (189,000) Estimated liability for 12/31/08 = 315,000 Professor Paul Sheldon Foote, California State University, Fullerton 2 ACCT 301B Spring 2009 Midterm Examination; Closed books and notes; no scrap paper; no programmable calculators or other devices; assigned seats. 3. A company issues $5,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2007. Interest is paid on June 30 and December 31. The proceeds from the bonds are $4,901,036. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2007 balance sheet?carrying value of the bonds be on the December 31, 2007 balance sheet?...
View Full Document

This note was uploaded on 11/08/2011 for the course ECON 102 taught by Professor Smith during the Spring '11 term at Saddleback.

Page1 / 10

ACCT 301B Spring 2009 Midterm A - ACCT 301B Spring 2009...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online