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Jenks Co. has $2,500,000 of 8% convertible bonds outstanding. Each $1,000 bond is convertible into 30 shares of $30 par value common stock. The bonds pay interest on January 31 and July 31. On July 31, 2007, the holders of $800,000 bonds exercised the conversion privilege. On that date the market price of the bonds was 105 and the market price of the common stock was $36. The total unamortized bond premium at the date of conversion was $175,000. Jenks should record, as a result of this conversion, a
a) credit of $136,000 to Paid-in Capital in Excess of Par.
b) credit of $120,000 to Paid-in Capital in Excess of Par.
c) credit of $56,000 to Premium on Bonds Payable.
d) loss of $8,000.
1. What is most unusual about the balance sheet? 2. Compute trend percentages for net sales and net income. Use 2003 as the base year. Which trend percentage looks strange? Explain your answer.
On January 1, 2009, Frederich Corporation purchased 7,500 shared of SportTech, Inc. as a Long-term investment for a total of $235,000.The 7,500 shares represent 30% of the outstanding (25,000) shareds of SportTech. Prepare the journal entries for ..
Illustrate the effect on the account and financial statements of paying and recording the March 17th payroll. Determine the following amounts of the employer payroll taxes related to the March 17th payroll: a) FICA tax payable b)state unemployment t..
Prepare a realistic flexible budget for next year for the McDonald's Corporation using economic and company trends. Use three different growth rates (low, average and high) for sales and adjust the expenses based on whether you assume that they v..
Returns and allowances amounted to $2,000. It purchased equipment normally selling for $10,000 at a 20% discount. Based on these facts, what is its gross income for the year?
compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the..
Assume that a U. S. company makes a purchase from a British company and agrees to pay a price of 2 million pounds. How will the U.S. company determine the cost of this purchase for the purpose of recording it in its accounting records? Briefly exp..
What are the steps involved in the preparation of an advance plan for the distribution of cash in a partnership liquidation to determine which step is the most difficult to execute correctly. Discuss possible ways to address the difficulties you i..
There is also a 40% chance of average demand with cash flows of $30 million per year as well as a 30% chance of low demand with cash flows of only $15 million per year. What is the expected NPV?
Knell Corporation sells a product for $230 per unit. The product's current sales are 33,000 units and its break-even sales are 26,400 units. The margin of safety as a percentage of sales is closest to:
Explorer, Inc., manufactures lanterns for camping. The company's direct labor rates have been set by the terms of the current labor contract. Direct labor rate standards have been assigned for each job classification.
Accounting basics Multiple choice questions. Make your selection by recording the letter in the answer box provided.
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