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(Solved) (Latest ver. Aug 2020) - Multiple choice

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A corporation issued $600,000 of 8%, 5-year bonds on January 1, at 102. Interest is paid semiannually on January 1 and July 1. If the corporation uses the straight-line method of amortization, the amount of bond interest expense to be recognized on July 1 is
a.$22,800.
b.$24,000.
c.$25,200.
d.$48,000.
Amway Company has total cash register receipts of $7,980. This total includes a 5% sales tax. The entry to record the receipts will include a
a.debit to Sales Tax Expense for $380.
b.credit to Sales for $7,980.
c.credit to Sales Taxes Payable for $399.
d.credit to Sales Taxes Payable for $380.
On January 1, 2003, Holt Company purchased 30,000 shares of the 100,000 common shares outstanding of Crane Company for $1,080,000. During 2003, Crane Company reported net income of $240,000 and paid a cash dividend of $110,000. The balance of the Stock Investments account on the books of Holt Company on December 31, 2003, is
a.$1,047,000.
b.$1,119,000.
c.$1,152,000.
d.$1,080,000
Dykes Corporation purchased 2,000 shares of Kile common stock at $70 per share plus $6,000 brokerage fees as a short-term investment. The shares were subse-quently sold at $80 per share less $6,800 brokerage fees. The cost of the securities purchased and gain or loss on the sale were
CostGain or Loss
a.$140,000$20,000 gain
b.$140,000$7,200 gain
c.$146,000$7,200 loss
d.$146,000$7,200 gain
Salvage (residual) value is deducted in the computation of depreciation expense in all of the following methods with the exception of
a.straight-line.
b.units-of-activity.
c.declining-balance.
d.All of the above include a deduction of salvage value.
Todd Corporation issues long-term bonds at a discount. Amortization of the discount will
a.decrease bond interest expense.
b.increase bond interest expense.
c.decrease the carrying value of the bonds on the balance sheet.
d.be reported as a loss on the income statement.

 







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