1) A company's board of directors votes to declare a cash dividend of 75 per share. The...
Question:
1) A company's board of directors votes to declare a cash dividend of 75¢ per share. The company has 15,000 authorized shares, 10,000 issued and 9,500 outstanding shares. What is the total amount of the cash dividend ?
2) Xtreme Sports has $100,000 of 8% non-cumulative non-participating preferred stock outstanding. Xtreme Sports also has $500,000 in common shares outstanding. In the company's first year of operation, no dividends were paid. During the second year, Xtreme Sports paid cash dividends of $30,000. How the dividend will be distributed?
3) Prior to June 1, a company has never carried out treasury stock operations. A company repurchased 100 shares of common stock on June 1 for $5,000. On July 1, it reissued 50 of these shares at $52 per share. On August 1, it reissued the remaining treasury shares at $49 per share. What is the balance in the Paid-In Capital, Treasury Stock account as of August 2?
4) A company must pay the bank $10,000 in cash in 3 years for a loan it made. The loan is at 8% interest compounded annually. The present value factor for 3 years at 8% is 0.7938. What is the present value of the loan?
5) A company borrowed $300,000 in cash from the bank by signing a 5-year 8% installment promissory note. The present value of an annuity at 8% for 5 years is 3.9927. Each annuity payment equals $75,137. What is the present value of the note?
6) A company borrowed $50,000 in cash from the bank and signed a 6-year 7% promissory note. The present value of a 7% 6-year annuity is 4.7665. Annual annuity payments equal $10,490. Calculate the present value of the loan?
7) A company bought equipment and signed a 7-year term loan at 9% annual interest. Annual payments equal $9,000. The present value of a 7-year annuity at 9% is 5.0330. What is the present value of the loan?
8) A company issues 20-year 9% bonds with a par value of $750,000. The current market rate is 9%. What is the amount of interest owed to bondholders for each semiannual interest payment?
9) On January 1 of Year 1, Drum Line Airways issued $3,500,000 of $3,200,000 par value bonds. The bonds pay interest semi-annually on January 1 and July 1. The contract interest rate is 7%, while the market interest rate for similar bonds is 8%. The premium or discount on the bond is amortized at the rate of $10,000 every six months.
What is the amount of total liabilities associated with the bond issue in the balance sheet of the company as of December 31 of year 1?
10) On January 1 of Year 1, Drum Line Airways issued $3,500,000 of $3,200,000 par value bonds. The bonds pay interest semi-annually on January 1 and July 1. The contract interest rate is 7%, while the market interest rate for similar bonds is 8%. The premium or discount on the bond is amortized at the rate of $10,000 every six months.
What would be the amount of interest expense recognized by Drum Line Airways on the bond issue in Year 1?
11) A company issued 5-year 7% bonds with a par value of $100,000. The company received $97,947 for the bonds. Using the straight-line method, calculate the amount of interest expense for the first semiannual interest period.
12) A company issued a 5-year 7% bond with a par value of $100,000. The market rate when the bonds were issued was 7.5%. The company received $97,947 in cash for the bonds. Using the effective interest method, calculate the amount of interest expense for the first semiannual interest period?
13) A company issues 9% par bonds with a par value of $100,000 on April 1, which is 4 months after the most recent interest date. How much total cash interest does the issuer of the bond receive on April 1?
14) A company issues 9% par bonds with a par value of $100,000 on April 1. The bonds pay interest semi-annually on January 1 and July 1. How much total cash interest does the bondholder receive on July 1?
15) A company issued 5-year 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 in cash for the bonds. Using the straight-line method, what is the amount of interest expense recorded for the first semiannual interest period?
16) A company issued 5-year 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 in cash for the bonds. Using the effective interest method, calculate the amount of interest expense recorded for the first semiannual interest period?
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry