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ACCT 301B Spring 2010 Midterm Answers A

ACCT 301B Spring 2010 Midterm Answers A - ACCT 301B Spring...

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ACCT 301B Spring 2010 Midterm Answers A 1 Given: Total Sales 4,200,000 Estimated warranty costs as a percentage of sales in year of sale 2% Estimated warranty costs as a percentage of sales in year after sale 4% Estimated warranty costs as a percentage of sales in second year after sale 6% Total Actual Warranty Expenditures, first three years 189,000 Find: liability at December 31, 2011 Answer: Sum of percentages 12% Liability $315,000 Chapter 13 2Given: Boxes sold 675,000 Estimated percentage of box tops to be redeemed 60% Box tops redeemed 330,000 Number of box tops each customer must submit 3 Cash each customer must submit $1.10 Cost of each bowl 2.50 Find: liability for outstanding premiums at end of 2010 Answer: $35,000 Chapter 13 3 Given: Accounts payable before year-end adjustments 370,000 Increase in prepaid asset and in accounts payable 50,000 Checks to vendors written but not mailed 100,000 Find: accounts payable, December 31, Year 1 Answer: $520,000 Chapter 13 4 Given: Bonds issued in dollars 6,000,000 Annual interest paid in percentage 6% Number of payments during each year 2 Present value of a single sum for 10 periods, 2.5% 0.7812 Present value of an annuity for 10 periods, 2.5% 8.75206 Find: proceeds from bond issue Answer: Interest paid each 6 months 180,000 Present value of principal 4,687,200 Present value of interest payments 1,575,371
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