Any Takers
Instructions for each section must be followed to the letter.
Section 1
Follow the instruction preceding each numbered exercise
Instructions for Exercise 6
Journalize the entry to record the accrual of the payroll taxes.
6) According to the accountant of Ulner Inc., its payroll taxes for the week were as follows:
$198.40 for FICA taxes.
$19.84 for federal unemployment taxes.
$133.92 for state unemployment taxes.
Instructions for Exercise 8
Identify each statement above as true or false. If false, indicate how to correct the statement.
8) Jim Thome has prepared the following list of statements about bonds.
1. Bonds are a form of interest-bearing notes payable.
2. When seeking long-term financing, an advantage of issuing bonds over issuing common
stock is that stockholder control is not affected.
3. When seeking long-term financing, an advantage of issuing common stock over issuing
bonds is that tax savings result.
4. Secured bonds have specific assets of the issuer pledged as collateral for the bonds.
5. Secured bonds are also known as debenture bonds.
6. Bonds that mature in installments are called term bonds.
7. A conversion feature may be added to bonds to make them more attractive to bond buyers.
8. The rate used to determine the amount of cash interest the borrower pays is called the stated rate.
9. Bond prices are usually quoted as a percentage of the face value of the bond.
10. The present value of a bond is the value at which it should sell in the marketplace.
Instructions for Exercise 18
Prepare the journal entries to record the following. (Round to the nearest dollar.)
(a) The issuance of the bonds.
(b) The payment of interest and the discount amortization on July 1, 2011, assuming that interest
was not accrued on June 30.
(c) The accrual of interest and the discount amortization on December 31, 2011.
18) Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2011, for
$562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable
semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize
bond premium or discount.
Instructions for Problem 3A
(a) Prepare the journal entry to record the issuance of the bonds.
(b) Prepare the adjusting entry to record the accrual of interest on December 31, 2011.
(c) Show the balance sheet presentation on December 31, 2011.
(d) Prepare the journal entry to record payment of interest on May 1, 2012, assuming no accrual
of interest from January 1, 2012, to May 1, 2012.
(e) Prepare the journal entry to record payment of interest on November 1, 2012.
(f) Assume that on November 1, 2012, Newby calls the bonds at 102. Record the redemption of
the bonds.
3A) On May 1, 2011, Newby Corp. issued $600,000, 9%, 5-year bonds at face value. The
bonds were dated May 1, 2011, and pay interest semiannually on May 1 and November 1.
Financial statements are prepared annually on December 31.
Instructions for Problem 6A
(Round all computations to the nearest dollar.)
(a) Prepare the journal entry to record the issuance of the bonds on July 1, 2011.
(b) Prepare an amortization table through December 31, 2012 (3 interest periods) for this bond
issue.
(c) Prepare the journal entry to record the accrual of interest and the amortization of the premium
on December 31, 2011.
(d) Prepare the journal entry to record the payment of interest and the amortization of the
premium on July 1, 2012, assuming no accrual of interest on June 30.
(e) Prepare the journal entry to record the accrual of interest and the amortization of the
premium on December 31, 2012.
6A) On July 1, 2011, Atwater Corporation issued $2,000,000 face value, 10%, 10-year
bonds at $2,271,813.This price resulted in an effective-interest rate of 8% on the bonds. Atwater
uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual
interest July 1 and January 1.
Section 2
Write a 350- to 700-word paper in which you differentiate between valuation, depreciation, amortization, and depletion. Is it appropriate to calculate depreciation using two different methods? Why?
Section 3
Imagine you are an executive for BP, and you are preparing a presentation for the board of directors about the organization’s direction.
Create a 10- to 15-slide Microsoft® PowerPoint® presentation, with speaker notes, in which you address the following:
- Evaluate the planning function of management as it relates to the organization’s goals and strategies. Use steps in the planning process outlined in the text.
- Analyze the influence that legal issues, ethics, and corporate social responsibility have had on management planning at BP. Provide at least one example for each.
- Analyze at least three factors that influence the company’s strategic, tactical, operational, and contingency planning.
*****Response must be consistent with APA guidelines complete with in-text citations as well as reference page. *****
