Swanson company purchased 400000 of malone corp 10 year

Assignment Help Accounting Basics

Reference no: EM13485977

Can anyone help me with these homework questions? I have put the answers to the multiple choice questions below, so please think of them as a, b, c, d, format. Thank you in advance.

1) Z Co. filed suit against W, Inc. in 2011 seeking damages for patent infringement. At December 31, 2011, legal counsel for Z believed that it was probable that Z would be successful against W for an estimated amount in the range of $30 million to 60 million, with each amount in that range considered equally likely. Z was awarded $40 million in April 201. Z should report this award in its 2011 financial statements, issued in March, 2012 as:

A) A receivable and unearned revenue of $40 million.

B) A receivable and revenue of $40 million

C) A disclosure of a gain contingency of $40 million

D) A disclosure of a gain contingency of an undetermined amount in the range of $30 million to $60 million

2) During the year, Franklin Corporation incurred the following costs in connection with the issuance of bonds:

Printing and engraving-30,000
Legal fees- 160,000
Fees paid to independent accounts for registration information-20,000
Commissions paid to underwriter-300,000

The amount recorded as a deferred Charge to be amortized over the term of the bond is
A)0.
B)30,000
C)300,000
D)510,000

3) Swanson Company purchased $400,000 of Malone Corp. 10 year bonds with a coupon interest rate of 8 percent payable semi-annually. At the time the bonds were purchased, the market interest rate was 12 percent. The amount of premium or discount on the purchase of the bonds, rounded to the nearest whole dollar is:
A) 91,759 Premium
B)91,759 Discount
C)92,442 Premium
D)92,442 Discount

4) Cute shoes issued a 20,000, 7-month, "noninterest-bearing note." The loan was made by Second Commercial Bank whose stated "discount rate" is 6%. The effective interest rate on this loan (rounded) is:

A)6.38%
B)6.2
C)7.25
D)9.57

Reference no: EM13485977

Questions Cloud

Calculate jims basis in his partnership interest at the end : the dairy partnership is owned equally to dan and jim. jims basis is 14000 at the beginning of the tax year. dans basis

Suppose a us treasury bond will pay 2500 five years from : suppose a u.s. treasury bond will pay 2500 five years from now. if the going interest rate on 5-year bond is 4.25. how

Hodge corporation issued 100000 shares of 20 par value : hodge corporation issued 100000 shares of 20 par value cumulative 6 preferred stock on jan 1 2013 for 2300000. in

Which of the following auditing procedures most likely : which of the following auditing procedures most likely would provide assurance about a manufacturing entitys inventory

Swanson company purchased 400000 of malone corp 10 year : can anyone help me with these homework questions? i have put the answers to the multiple choice questions below so

An auditor concluded that no excessive costs for idle plant : an auditor concluded that no excessive costs for idle plant were charged to inventory. this conclusion most likely

To gain assurance that all inventory items in a clients : to gain assurance that all inventory items in a clients inventory listing schedule are valid an auditor most likely

Pimples has a salaried position with a large corporation : 1. pimples signs a contract to purchase a parcel of land. the contract recites that 44 acres are being sold. it

The company recently paid their annual dividend of 130 per : the common stock of andys sporting goods sells for 25.40 a share. the company recently paid their annual dividend of

User Account

All Pages