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1) A company produces two boat models, Flyer and Skimmer. Both products are being
considered for major investment projects next year. Relevant data follow:
Required:
Use the payback period to evaluate these two investment projects.
2) On January 1, a company issues 8%, 5 year, $300,000 bonds that pay interest
semiannually each June 30 and December 31. On the issue date, the annual market rate
of interest for the bonds is 10%. Compute the price of the bonds on their issue date. The
following information is taken from present value tables:
3) Williams Co. operates three separate departments (R, S, T). The data below is
provided for the current year:
Required:
Prepare an income statement showing the departmental contributions to overhead for
the current year.
4) For each of the accounts in the following table (1) identify the type of account as an
asset, liability, equity, revenue, or expense, and (2) identify the normal balance of the
account.
5) George Butler owned a tugboat and was tired of his current job. He decided to open a
business that provides day tugboat tours to tourists along the Mississippi River near his
hometown. Prepare journal entries to record the following transactions.
6) What are known current liabilities? Cite at least two examples of known current
liabilities.
7) Use the information provided below to calculate the cash paid for interest for the
period.
