Find accounts increased or decreased by purchase of bond

Assignment Help Finance Basics
Reference no: EM1352031

3 Staffing Company purchased net assets (i.e., assets minus liabilities) of Time Management Inc. for $390,000. Time Management Inc. is a retailer of software, books, seminars and related items. Its net asset has been carried on its books at a total of $183,000. An appraisal of all of Time Management Inc. assets and liabilities revealed a net fair market value of $299,000. Staffing Company is willing to pay extra because of Time Managementâ??s very loyal retail customers, most of who have dealt exclusively with the company for many years and also their loyal employees who have been with the company for many years. What is the amount of goodwill that Staffing Company should record at acquisition of the Time Management Inc.?

4. On Jan. 1, Highland Corporation purchased $85,000 of 6%, three-year bonds as a long term investment. Interest is paid annually. The company is not involved in active trading of securities.

a.What accounts are increased and/or decreased by the purchase of this bond and and by which amount?

b.What accounts are increased and/or decreased by the receipt of the first interest payment on the bonds part A and by which amount?

c.Assuming the company intends to hold the bonds to maturity, what accounts are increased and/or decreased at the end of the first year if the market value of the bonds is $88,500 at that time?

d.How would your answer part C differ if the company does not intend to hold the bonds to maturity? What accounts would be increased and/or decreased at the end of the first year then and by what amount?

Reference no: EM1352031

Questions Cloud

Draw a labelled diagram corresponding to each mode : Consider two simple pendulums p and q of equal length l and mass m1 and m2 respectively. assume the bobs of the pendulum are connected to each other by a weightless spring of force constant k such that in the equilibrium position,the spring is uns..
Management in a mobile society : What are the management issues in a geographically mobile society? Provide an experience/example that supports your views.
Stages of human development-erikson : Identify Erikson's eight stages of human development and discuss the conflicts associated with each of them. Do you agree with his stages? Why or why not?
Evaluate options considering future gold prices : Strik-It-Rich can postpone the expansion for a year by buying a purchase option on the land for $25,000. What should Strik-It-Rich's management do?
Find accounts increased or decreased by purchase of bond : Three Staffing Company purchased net assets of Time Management Inc. for $390,000. Time Management Corporation is a retailer of software, books, seminars and related items.
Illustrate the opportunity cost between the two goods : Illustrate the opportunity cost between the two goods is always constant. Which of the following combinations of the two goods, X and Y, is it possible for the economy can produce?
What is the tension of the rope : A 68 kg person sits on a 4.0 kg chair. Each leg of the chair makes contact with the floor in a circle that is 1.2 cm in diameter . Find the pressure exerted on the floor by each leg of the chair, assume the weight is evenly distributed.
Determine the functional dependencies : Using your knowledge of the college environment, determine the functional dependencies that exist in the following?
Analyze siemens external/internal environment : Presume your group is a consulting team asked by the Siemens to analyze its external/internal environment and make strategic recommendations.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd