[The following information applies to the questions displayed below.] On January 1, Year 1, Jones Company issued bonds with a $200,000 face value, a stated rate of interest of 7.5%, and a 5-year term to maturity. The bonds were issued at 97. Interest is payable in cash on December 31st of each year. The company amortizes bond discounts and premiums using the straight-line method.What is the total amount of liabilities shown on Jones' balance sheet at December 31, Year 2?
A. $196,400
B. $195,200
C. $194,000
D. $191,600
Answer: A
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The Lane Company incurred the following expenditures in January 2016: (1 ) research and development costs of $510,000 that resulted in a new product that was patented during the year, (2 ) $12,000 in legal fees to have the patent registered, (3 ) $100,000 in advertising costs to develop a trademark for the newly patented product, (4 ) Legal fees of $8,000 incurred with the registration of the
trademark, which will only be used for five years, and (5 ) $25,000 of advertising costs to promote its good name. Benefits to be derived from the patent are expected to last for five years. The president believes the promotion of Lane's good name will benefit the firm for three years. How much amortization expense should Lane recognize for 2016? A) $1,000 B) $4,000 C) $9,000 D) $25,000
Which of the following financial statements shows the dividends distributed to stockholders?
A) Income statement B) Statement of retained earnings C) Budgeted balance sheet D) Balance sheet
Which of the following is true of the times-interest earned (TIE) ratio of a firm??
A. ?The lower the TIE ratio, the higher the probability that the firm will default on its debt. B. ?The TIE ratio is calculated by dividing net income by interest charges. C. ?The TIE ratio increases if the debt/assets ratio increases and vice versa. D. ?The TIE ratio is always more than 1. E. ?The TIE ratio shows the effects of both operating leverage and financial leverage.
Briefly explain how the supplies on hand account is adjusted at the end of the period.
What will be an ideal response?