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67.Bonds that are subject to retirement prior to maturity at the option of the issuer are called a.debentures b.callable bonds c.early retirement bonds d.options 68.On January 1 of the current year, the Barton Corporation issued 10% bonds with a face value of $200,000.  Thebonds are sold for $191,000.  The bonds pay interest semiannually on June.
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Bonds payable, 9% issued at face X Co. $5,000,000 Y Co. $3,000,000 Common stock, $25 par 3,000,000 3,000,000 Income tax is estimated at 40% of income for both companies. Determine for each company the earnings per share of common stock, assuming that the income before bondinterest and income taxes is $2,280,000 each. 133.  Ulmer Company is considering the following alternative.
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153.  The partnership of Miner Company began operations on January 1, with contributions as follows: Waverley $35,000 Marquez 40,000 The following additional partner transactions took place during the year: (1)             In early January, Houston is admitted to the partnership by contributing $25,000 cash fora 25% interest. (2)             Net income of $160,000 was earned.  In addition, Waverley received.
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136.  A $375,000 bond issue on which there is an unamortized discount of $40,000 is redeemed for $320,000.  Journalizethe redemption of the bonds. 137.  A $500,000 bond issue on which there is an unamortized discount of $35,000 is redeemed for $475,000.  Journalizethe redemption of the bonds. 138.  A $500,000 bond issue on.
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65.As part of the initial investment, Ray Blake contributes equipment that had originally cost $125,000 and on whichaccumulated depreciation of $100,000 has been recorded.  If similar equipment would cost $150,000 to replace andthe partners agree on a valuation of $29,000 for the contributed equipment, what amount should be debited to.
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21.The amortization of a premium on bonds payable decreases bond interest expense. a.True b.False 22.If the amount of a bond premium on an issued 11%, 4-year, $100,000 bond is $12,928, the semiannual straight-lineamortization of the premium is $1,416. a.True b.False 23.If the amount of a bond premium on an issued 11%, 4-year, $100,000 bond is $12,928,.
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153.  What is a partnership?  List three advantages and three disadvantages of the partnership form of businessorganization. 154.  Jesse and Tim form a partnership by combining the assets of their separate businesses.  Jesse contributes accountsreceivable with a face amount of $50,000 and equipment with a cost of $180,000 and accumulated depreciation.
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153.  Reardon and Reese had capital balances of $140,000 and $160,000, respectively, at the beginning of the currentfiscal year. The partnership agreement provides for salary allowances of $25,000 and $35,000, respectively, anallowance of interest at 12% on the capital balances at the beginning of the year, and the remaining net.
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153.  Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscalyear. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively, an allowanceof interest at 12% on the capital balances at the beginning of the year; and with the.
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105.Samuel and Darci are partners.  The partnership capital for Samuel is $50,000 and for Darci is $60,000.  Josh isadmitted as a new partner by investing $50,000 cash.  Josh is given a 20% interest in return for his investment.  Theamount of the bonus to the old partners is a.$0 b. $18,000 c. $8,000 d. $10,000 106.Abby.
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153.  Prior to liquidating their partnership, Samuel and Brian had capital accounts of $60,000 and $240,000, respectively.The partnership assets were sold for $120,000. The partnership had no liabilities. Samuel and Brian share incomeand losses equally. Required: Determine the amount of Samuel’s deficiency. b. Determine the amount distributed to Brian, assuming Samuel is unable.
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1.A bond is simply a form of an interest-bearing note. a.True b.False 2.Bondholders are creditors of the issuing corporation. a.True b.False 3.Bondholders claims on the assets of the corporation rank ahead of stockholders. a.True b.False 4.A bond is usually divided into a number of individual bonds of $500 each. a.True b.False 5.If the bondholder has the right to exchange a bond for.
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145.Partners Ken and Macki each have a $40,000 capital balance and share income and losses in a ratio of 3:2.  Cashequals $20,000, noncash assets equal $120,000, and liabilities equal $60,000.  If the noncash assets are sold for$50,000, and each partner is personally insolvent, Partner Macki will eventually receive cash of a.$0 b..
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115.Benson and Orton are partners who share income in the ratio of 2:3 and have capital balances of $60,000 and$40,000, respectively.  Ramsey is admitted to the partnership and is given a 40% interest by investing$20,000.  What is Benson’s capital balance after admitting Ramsey? a. $20,000 b. $24,000 c. $48,800 d. $71,200 116.Benson and Orton are.
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146.  A company issued $1,000,000 of 30-year, 8% callable bonds on April 1, with interest payable on April 1 andOctober 1.  The fiscal year of the company is the calendar year.  Journalize the entries to record the followingselected transactions: Year 1 Apr. 1Issued the bonds for cash at their face amount.Oct. 1Paid.
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133.  Sorenson Co., is considering the following alternative plans for financing the company: Plan I Plan II Issue 10% bonds (at face) — $3,000,000 Issue $10 par common stock $4,000,000 1,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming incomebefore bond interest and income tax.
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87.If the market rate of interest is greater than the contractual rate of interest, bonds will sell a.at a premium b.at face value c.at a discount d.only after the stated rate of interest is increased 88.The interest expense recorded on an interest payment date is increased a.only if the market rate of interest is less than.
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146.  On August 1, Clayton Co. issued $1,300,000 of 20-year, 9% bonds, dated August 1, for $1,225,000.  Interest ispayable semiannually on February 1 and August 1.  Present the entries to record the following transactions for thecurrent year. (a)          Issuance of the bonds. (b)         Accrual of interest and amortization of bond discount for.
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41.Dissolution is the term which solely means to liquidate the partnership. a.True b.False 42.In partnership liquidation, gains and losses on the sale of partnership assets are divided among the partners' capitalaccounts on the basis of their capital balances. a.True b.False 43.If the share of losses on realization of the sale of noncash assets exceeds the balance.
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153.  Immediately prior to the process of liquidation, partners Micco, Niccum, and Orwell have capital balances of$70,000, $20,000, and $30,000, respectively.  There is a cash balance of $10,000, noncash assets total $160,000, andliabilities total $50,000.  The partners share net income and losses in the ratio of 2:2:1. Journalize the entries to.
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95.Tomas and Saturn are partners who share income in the ratio of 3:1.  Their capital balances are $80,000 and$120,000, respectively.  Income Summary has a credit balance of $30,000.  What is Tomas’s capital balance afterclosing Income Summary to the capital accounts? a. $102,500 b. $22,500 c. $57,500 d. $127,500 96.Tomas and Saturn are partners who share.
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Match each statement to the appropriate term (a-h): a.  deficiency b.  realization c.  proprietorship d.  partnership e.  mutual agency f.   liquidation g.  income sharing ratio h.  statement of partnership equity 153.  Where changes in partner capital accounts for a period of time are reported 154.  The share of loss on realization is greater than the balance in partner capital 155.  Each.
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117.On January 1, Year 1, Zero Company obtained a $52,000, 4-year, 6.5% installment note from Regional Bank. Thenote requires annual payments of $15,179, beginning on December 31, Year 1. The December 31, Year 3 carryingamount in the amortization table for this installment note will be equal to a.$0 b. $13,000 c. $14,252 d. $16,603 118.An.
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153.  Holly and Luke formed a partnership, investing $240,000 and $80,000, respectively.  Determine their participation inthe year’s net income of $380,000 under each of the following independent assumptions: (a)             No agreement concerning division of net income (b)             Divided in the ratio of original capital investment (c)             Interest at the rate of 15% allowed.
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97.Bonds with a face amount $1,000,000 are sold at 98. The entry to record the issuance is a. Cash Premium on Bonds Payable1,000,000 20,000 Bonds Payable980,000 b. Cash980,000 Premium on Bonds Payable20,000 Bonds Payable1,000,000 c. Cash980,000 Discount on Bonds PayableBonds Payable20,000 1,000,000 d. Cash Bonds Payable980,000 980,000 98.If bonds payable are notcallable, the issuing corporation a.can exchange them for common stock b.can repurchase them in the.
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55.Which of the following is a characteristic of a general partnership? a.The partners have co-ownership of partnership property. b.The partnership is subject to federal income tax. c.The partnership has an unlimited life. d.The partners have limited liability. 56.Which of the following is nota characteristic of a general partnership? a.the partnership is created by a contract b.mutual agency c.partners.
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153.  After discontinuing the ordinary business operations and closing the accounts on May 7, the ledger of thepartnership of Anna, Brian, and Cole indicated the following: Cash $7,500 Noncash Assets 105,000 Liabilities $27,500 Anna, Capital 45,000 Brian, Capital 15,000 Cole, Capital 25,000 $112,500 $112,500 The partners share net income and losses in the ratio of 3:2:1.  Between May 7-30, the noncash assets were soldfor $150,000,.
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153.  Watson purchased one­half of Dalton’s interest in the Patton and Dalton partnership for $45,000. Prior to theinvestment, land was revalued to a market value of $135,000 from a book value of $93,000. Patton and Daltonshare net income equally. Dalton had a capital balance of $35,000 prior to these transactions. Required: Provide.
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153.  The capital accounts of Hope and Indiana have balances of $115,000 and $95,000, respectively.  Clint and Caseyare to be admitted to the partnership.  Clint buys one­fifth of Hope’s interest for $30,000 and one­fourth ofIndiana’s interest for $20,000.  Casey contributes $45,000 cash to the partnership, for which he is to.
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31.A corporation often issues callable bonds to protect itself against significant declines in future interest rates. a.True b.False 32.Callable bonds can be redeemed by the issuing corporation at the fair market price of the bonds. a.True b.False 33.Only callable bonds can be purchased by the issuing corporation before maturity. a.True b.False 34.Callable bonds are redeemable by the issuing corporation.
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57.One potential advantage of financing corporations through the use of bonds rather than common stock is a.the interest on bonds must be paid when due b.the corporation must pay the bonds at maturity c.the interest expense is deductible for tax purposes by the corporation d.a higher earnings per share is guaranteed for existing common.
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153.  The capital accounts of Heidi and Moss have balances of $90,000 and $65,000, respectively on January 1, thebeginning of the current fiscal year.  On April 10, Heidi invested an additional $8,000.  During the year, Heidi andMoss withdrew $40,000 and $32,000, respectively, and net income for the year was $120,000. .
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21.If the net income of a partnership is less than the total of the allowances provided by the partnership agreement, thedifference must be divided among the partners in the income-sharing ratio. a.True b.False 22.The amount that a partner withdraws as a monthly salary allowance does notaffect the division of net income. a.True b.False 23.Partner A devotes.
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146.  Brubeck Co. issued $10,000,000 of 30-year, 8% bonds on May 1 of the current year, with interest payable on May1 and November 1.  The fiscal year of the company is the calendar year.  Journalize the entries to record thefollowing selected transactions for the current year: May   1Issued the bonds for.
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125.Paul and Roger are partners who share income in the ratio of 3:2.  Their capital balances are $90,000 and $130,000,respectively.  Income Summary has a credit balance of $50,000 after the second closing entry.  What is Roger’scapital balance after closing Income Summary to the capital accounts? a. $155,000 b. $150,000 c. $110,000 d. $115,000 126.Paul and.
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107.Bonds Payable has a balance of $1,000,000 and Premium on Bonds Payable has a balance of $7,000.  If the issuingcorporation redeems the bonds at 101, what is the amount of gain or loss on redemption? a.$3,000 loss b.$3,000 gain c.$7,000 loss d.$7,000 gain 108.When the bonds are sold for more than their face value, the.
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153.  Derek and Hailey, partners sharing net income in the ratio of 2:1, admit Ben to the partnership in accordance withthe following agreement: (1)         Merchandise inventory recorded in the partnership accounts at $62,500 is to be revalued atits current replacement price of $68,500. (2)         Ben is to invest $48,000 in cash for.
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85.Henry Jones contributed equipment, inventory, and $44,000 cash to the partnership.  The equipment had a bookvalue of $35,000 and market value of $28,000.  The inventory had a book value of $25,000, but only had a marketvalue of $12,000 dueto obsolescence.  The partnership also assumed a $15,000 note payable owed by.
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Match each statement to the appropriate term (a-h). partnership partnership agreement distribution of remaining cash to partners mutual agency equally death of a partner liquidation unlimited liability 154.  When a partnership cannot pay its debts with business assets, the partners must use personal assets to meet thedebt 155.  Agreement that is the contract between partners 156.  A voluntary association of two.
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77.Dylan Corporation issues for cash $2,000,000 of 8%, 15-year bonds, interest payable annually, at a time when themarket rate of interest is 9%.  The straight-line method is adopted for the amortization of bond discount orpremium.  Which of the following statements is true? a.The amount of annual interest paid to bondholders remains.
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135.Harriet, Mickey, and Zack decide to liquidate their partnership.  All assets are sold and the liabilities arepaid.  Following these transactions, the capital balances and profit and loss percentages are as follows: Harriet,$27,000 and 30%; Mickey, $(12,000) and 40%; Zack, $43,000 and 30%.  Mickey is unable to contribute any assetsto reduce.
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41.The interest portion of an installment note payment is computed by multiplying the interest rate by the carryingamount of the note at the end of the period. a.True b.False 42.Bonds payable should be reported on the balance sheet at face value plus or minus any unamortized premium ordiscount. a.True b.False 43.The balance in a bond discount.
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31.When a new partner is admitted by making an investment in the partnership, the old partners' capital accounts arealways credited. a.True b.False 32.When a new partner is admitted by making an investment of assets in the partnership and the new partner has topay a premium for admission, a bonus is divided among the.
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75.Seth and Rachel have original investments of $50,000 and $100,000, respectively, in a partnership.  The articles ofpartnership include the following provisions regarding the division of net income: interest on original investment at10%; salary allowances of $27,000 and $18,000, respectively; and the remainderdivided equally.  How much of thenet loss of $16,000.
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153.  Emmett and Sierra formed a partnership dividing income as follows: 1.  Annual salary allowance to Emmett of $48,000 2.  Interest of 8% on each partner’s capital balance on January 1 3.  Any remaining net income divided equally Emmett and Sierra had $25,000 and $140,000, respectively, in their January 1 capital balances.  Net income.
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