Question 14 of 30 A company includes one coupon in each bag of dog food it sells

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Question 14 of 30
A company includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.50 each. The company's experience indicates that 60 percent of the coupons will be redeemed. During 2014, 100,000 bags of dog food were sold, 12,000 toys were purchased, and 40,000 coupons were redeemed. During 2015, 120,000 bags of dog food were sold, 16,000 toys were purchased, and 60,000 coupons were redeemed.
For the year ending 2015, the company should report Premium Expense on its income statement of:
$25,000
$27,500
$22,000
$37,000
None of these answers are correct
Question 15 of 30
A company issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2014. Interest is paid on June 30 and December 31. The proceeds from the bonds are $9,802,072. What is interest expense for 2015, using straight-line amortization?
$1,026,805
None of these are correct
$780,000
$784,596
$789,896
Question 16 of 30
Which of the following represents the total number of shares that a corporation may issue under the terms of its charter?
none of these answers are correct
Issued shares
Unissued shares
Authorized shares
Outstanding shares
Question 17 of 30
Jackson Company issues $10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2012. Interest is paid on June 30 and December 31. The proceeds from the bonds are $9,802,072. Using effective-interest amortization, how much interest expense will be recognized in 2012?
$780,000
$784,249
$390,000
None of these answers are correct
$784,166
Question 18 of 30
On January 1, a company issued $4,000,000, 9% bonds for $3,756,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. The company uses the effective-interest method of amortizing bond discount. At the end of the first year, the company should report unamortized bond discount of
$228,400
None of these answers are correct
$204,000
$219,600
$206,440

Explanation / Answer

Solution:

Therefore, the answer to the above question is $ 789,896.

Authorized Shares represents the total number of shares that a corporation may issue under the terms of its charter.

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Interest Expense using Straight line Amortization Coupon Rate 7.80% Face Value 10,000,000 Semiannual Interest Payments i.e. 7.8% /2 * $ 10,000,000          390,000 Discount = Face Value - Issue Price Issue Price 9,802,072 Discount = Face Value - Issue Price 197,928 Number of Periods 40 Per Period Discount 4948.2 Interest Expense = Discount + Interest Payments          394,948 Since, payment are made 2 times a year, therefore          789,896

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