1) Briefly describe both the payback period method and the net present value method of
comparing investment alternatives.
2) Explain the difference between a large stock dividend and a small stock dividend. In
addition, explain how to record these two types of stock dividends.
3) Long-term investments in held-to-maturity debt securities are accounted for using the
___________________________.
4) A company issued 9%, 10-year bonds with a par value of $100,000. Interest is paid
semiannually. The market interest rate on the issue date was 10%, and the issuer
received $95,016 cash for the bonds. On the first semiannual interest date, what amount
of cash should be paid to the holders of these bonds for interest?
5) A company’s inventory records indicate the following data for the month of July:
If the company uses the weighted average inventory valuation method and the perpetual
inventory system, what would be the cost of its ending inventory?
6) Describe at least five benefits of budgeting.