The Value of Money Questions 1 to 20: Select the best answer to each question. N

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The Value of Money Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer 1. The maturity value equals A. the principal plus all interest due. B. the principal plus interest paid. C. the interest due minus interest paid. D. the interest due by the maturity date 2. Henderson Roofing made a basket purchase of three items for $125,000. Item A is appraised at $35,000; item B is appraised at $55,000, and item C is appraised at $60,000. Item B should be recorded in the amount A. ($55,000/S95,000) x $150,000 B. ($55,000/S95,000) x $125,000 C. (S55,000/S125,000) x $150,000 D. ($55,000/$150,000) x $125,000 3. A building was purchased on August 1 for $450,000. The building has a salvage value of $38,000 and a useful life of 35 years. Using the straight-line method, how much is the depreciation expense for the building for the first year, ending December 31 (to the nearest dollar)? A. $11,771 B. S12,857 C. $5,357 D. $4,905 4. A three-month note dated June 12 will mature on A. September 1 B. September 30 C. June 12. D. September 12 5. A $450 collection on a note from a customer is reflected on Columbia Electric's bank statement. When doing the bank reconciliation, Columbia should A. subtract $450 from their book balance. B. add $450 to their book balance C. add $450 to the bank balance

Explanation / Answer

1)correct otpion is A"

Maturity value includes face value plus all accrued interest

2)Total appraisal value = 35000+55000+60000=150000

Amount allocated to B : 55000*125000/150000

correct option is "D"

3)Depreciation expense = [cost-salvage]/useful life

= [450000-38000]/35

= 11771

depreciation for first year = 11771*5/12= 4905 [1aug- 31dec =5 months[

correct option is "d"

4)correct option is "D"

Maturity dATE : june 1 2+ month = 12 september.

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