1. On April 1 of the current year, a company paid $150,000 cash to purchase 7%, 10-year bonds that had a par value of $150,000 and paid interest semiannually each April 1 and October 1. The company intends to hold these bonds until they mature. Prepare the journal entry to record the bond purchase, the receipt of the first semiannual interest payment on October 1 of the current year, and the accrual of interest for the year-end December 31. 2. BC Company uses a job order cost accounting system.

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1. On April 1 of the current year, a company paid $150,000 cash to purchase 7%, 10-year bonds that had a par value of $150,000 and paid interest semiannually each April 1 and October 1. The company intends to hold these bonds until they mature. Prepare the journal entry to record the bond purchase, the receipt of the first semiannual interest payment on October 1 of the current year, and the accrual of interest for the year-end December 31. 2. BC Company uses a job order cost accounting system. During the month of April, the following events occurred: (a) Purchased raw materials on credit, $32,000. (b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials. (c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor. (d) Assigned the factory payroll to jobs and overhead. Make the necessary journal entries to record the above transactions and events. 3. Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method. Rashid Corporation Income Statement For Year Ended December 31, 2007 Sales…………………………………………………………………………………..$504,000 Cost of goods sold………………………………$327,600 Depreciation expense………………………… 42,000 Other operating expenses………………….. 125,500 (495,100) Other gains (losses): Gain on sale of equipment………………………………………………….. 7,200 Income before taxes…………………………………………………………….$ 16,100 Income tax expense……………………………………………………………..(4,800) Net income………………………………………………………………………….$ 11,300 Rashid Corporation Balance Sheet At December 31 Assets: 2007 2006 Cash $ 64,650 $ 55,800 Accts. Receivable 21,000 29,000 Inventory 58,000 52,100 Equipment 240,000 222,000 Accum. Depreciation (106,000) ( 96,000) Total assets $277,650 $262,900 Liabilities: Accts. Payable $ 28,400 $ 23,700 Income taxes payable 1,050 1,200 Total liabilities $ 29,450 $ …

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