ACCT 301B Spring 2009 Midterm Answers A

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

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right 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 Answers A 1Given: Zero-interest-bearing note payable $400,000 Discount rate 9% Find: effective interest for 12 months Answer: Discount $36,000 Effective interest 9.89% 2Given: Estimated warranty cost percentage in year of sale 2% Estimated warranty cost percentage in year after sale 4% Estimated warranty cost percentage two years after sale 8% Sales 2006 $600,000 Sales 2007 $1,500,000 Sales 2008 $2,100,000 Sales total for three years $4,200,000 Actual warranty expenditures 2006 $9,000 Actual warranty expenditures 2007 $45,000 Actual warranty expenditures 2008 $135,000 Actual warranty expenditures total for three years $189,000 Find: warranty liability at December 31, 2008 Answer: Sum of percentages 14% Warranty liability $399,000 3Given: Bond principal $5,000,000 Stated interest rate 7.80% Priced to yield 8.00% Number of times per year interest paid 2 Proceeds received on the first day of the year $4,901,036 Find: using effective interest rate amortization, carrying value of bonds at end of first year...
View Full Document

Ask a homework question - tutors are online