Question

18. An $80,000 bond issue priced at 97 is sold for 19. Term bonds for $78,200 are of shorter duration than serial bonds and pays interest semiannually percent, a face value of $20,000, a interest paynmeterest rate of each period intive interest method of amortizing a bond discount, the bond interest expense each period increase recorded for s over the life of the bond. 22. Extra gains and losses are a component of income from operations 23. A gain on the sale of an asset is a component of income from operations 24. valuc of th sock from Retained Eanings to Contributed Aasosk split resitsirft Capital. 25. The purchase of trading securities with cash is considered an investing activity 26. The acquisition of treasury stock with cash is shown as an investing activity on the statement of cash flows. F Cash inflows and outflows are easier to manipulate than earnings. The primary purpose of the statement of cash flows is to provide information about a company's investing 27. 28. and financing activities during an accounting period 29. Repayments of accounts payable or accrued liabilities are considered repayments of loans under financing activities Under the indirect method, gains or losses from the sale of equipment used in operations would appear as 30 ustments in the cash flows from operating activities section of the statement of cash flows. decrease in the balance ws from operating activities using the indirect method of merchandise inventory is added to net income when calculating net cash and sales of long-term investments for the period should be netted for disclosure in the investing activities section of the statement of cash flows 33. Issuance of notes, either long- or short-term, would be reflected in the financing activities section of the statement of cash flows. 34. Dividends paid are reflected in the financing activities section of the statement of cash flows. 35. Investors, creditors, and customers are considered extenal users of financial statements. 36. Liquidity is the ability to earn a satisfactory net income. 37. Profitability is the ability to pay bills when due and to meet unexpected needs for cash rue and False (2 point eaC

Answer 1

18. Solution : The correct option is “FALSE”

Explanation: An $ 80,000 bond is issued at $ 97 is sold at as follows:

         Sale price= $( 80,000*0.97)=$ 77,600

Therefore the amount given i.e $ 78200 is false