1) On January 1, a company issues bonds with a par value of $300,000. The bonds
mature in 5 years and pay 8% annual interest each June 30 and December 31. On the
issue date, the market rate of interest is 6%. Compute the price of the bonds on their
issue date. The following information is taken from present value tables:
2) When factory payroll for indirect labor is assigned, __________________ is debited.
3) ____________ are the increases in equity from a company’s earnings activities
4) Fast Auto Parts is an auto parts wholesaler that stocks several major brand names for
Complete Auto Parts stores across the country. Complete Auto Parts does not assume
responsibility for parts until they are sold to the customer. Identify the consignor and
the consignee. Which company should include any unsold goods as part of its
inventory?
5) Conley and Liu allow Lepley to purchase a 25% interest in their partnership for
$35,000 cash. Lepley has exceptional talents that will enhance the partnership. Conley’s
and Liu’s capital account balances are $55,000 each. The partners have agreed to share
income or loss equally. Prepare the general journal entry to record the admission of
Lepley to the partnership.
6) Describe the flow of labor in a process cost accounting system, including accounts
used.
7) Describe the accounting for natural resources, including their acquisition, cost
allocation, and account titles.
8) Define the cash flow on total assets ratio and explain how it is used to evaluate cash
flows and to assess company performance.
9) All cash transactions eventually affect noncash ___________ accounts.
10) Risk is the _________________ about the return an investor expects to earn.