Exam 11: Reporting and Interpreting Stockholders Equity

How much would Kristen have to deposit in the bank today if she will be earning a 6% annual rate of return and wants to have $5,000 in the bank at the end of five years? (Round to the nearest dollar).

In 2012,H Co's times interest earned ratio was 2.51 while T Co's ratio for that year was .80.Which of the following statements is false?

Positive financial leverage occurs in which of the following situations?

The carrying amount of a bond not issued at face value will always move

How much would Kristen have to deposit in the bank at the end of each of the next five years if she wishes to have $5,000 in the bank at the end of that time period,assuming she will be earning 6% annual rate of return? (Round to the nearest dollar).

On July 1,20A,Wilson Company issued $300,000,five-year,9% bonds at 103.The reason Wilson issued the bonds at a premium was which of the following?

On January 1,20A,Tie Company purchased a machine that had a sticker (list)price of $22,000.The seller agreed to allow Tie Company to pay for the machine over a three-year period at 10% interest on the unpaid balance and with equal payments of $8,444 due at the end of 20A,20B,and 20C.What is the amount that should be debited to the asset account,Machinery,on the day the contract was initiated is (rounded to the nearest dollar)?

Callable bonds may be which of the following?

For the bondholder (investor),amortization of a bond premium each interest period will increase the reported amount of interest revenue.

Bonds held as investments should not be reported in the intangible assets section of the statement of financial position.

An amount is to be deposited in a savings account at the end of each year in order to provide funds for a trip to Europe at the end of the fourth year.You have been asked to determine the amount of the annual deposit.What is the interest concept that best describes this application? A.Present value of a single amount. B.Present value of an annuity. C.Future value of a single amount. D.Future value of an annuity.

When a company prepares a bond indenture,certain provisions of the bonds are included.Which of the following are not provisions specified in the indenture?

A bond premium can be considered to be

Bonds usually are issued to obtain cash for what purpose?

Which of the following statements is true?

On January 1,20A,Winston Corporation sold a four-year,$10,000,7% bond.The interest is payable annually each December 31.The issue price was $9,668 based on an 8% effective interest rate.Assuming effective-interest amortization is used,the interest expense on the 20A income statement would be which of the following amounts (to the nearest dollar)?

When a bond investment is sold (issued)at a discount,subsequent amortization of the discount does which of the following?

Bonds are more attractive to some investors instead of preferred shares because creditors have a preferential claim against the assets over that of preferred shareholders.

You have been asked to compute the amount of a fund that will be available at the end of three years as a result of a single sum of $1,000 that is deposited.What is the interest concept that best describes this application?

Why are present value concepts and applications so important when companies purchase equipment financed by the seller?