Response to the following:
1. Question :Estimated liabilities are ________.
2. Question :Liabilities are _______.
3. Question :Beau Brentley earned $60,000 from his job at Bridgestone Tires. He had 15% of his gross pay withheld for federal income taxes, 6.2% withheld for FICA Social Security taxes, and 1.45% withheld for Medicare taxes. What was Beau's net pay?
4. Question :Brook's Bike Company sold 80 mountain bikes during May. The company offered a one-year warranty. Future warranty expense was estimated to be $25 per bike. During May, the company spent $115 on parts and labor to repair three bikes that were under warranty. The warranty expense for May was ________.
5. Question :On January 1, 2011, Climax Corporation signed a $10,000,000, 6%, 10-year mortgage note to finance the construction of its new hotel in Cancun. The note will be repaid in 10 equal annual installments of $1,358,679. The first payment was made on December 31, 2011. How much of the first mortgage payment was interest? Round your answer to the nearest dollar.
6. Question :On January 1, 2011, Climax Corporation signed a $10,000,000, 6%, 10-year mortgage note to finance the construction of its new hotel in Cancun. The note will be repaid in 10 equal annual installments of $1,358,679. Over the 10-year period, as each installment payment is made, the portion of the payment that is used to reduce the principal will ________.
7. Question :On January 1, 2011, Ajax Corporation signed a $1,000,000, 7%, 10-year mortgage note to buy a new warehouse. The note will be repaid in 10 equal annual installments of $142,378. The first payment was made on December 31, 2011. How much of the first mortgage payment will be used to reduce the principal? Round your answer to the nearest dollar.
8. Question :When a bond sells for par value, its stated interest rate is ________.
9. Question :When a bond sells at its face amount, the market rate of interest is ________.
10. Question :When a bond sells at less than its face amount, the market rate of interest is ________.
11. Question :When a bond sells for 103, the bond is selling at ________.
12. Question :When a bond sells for 98, the bond is selling at ________.
13. Question :On January 1, Wok 'n' Roll, Inc. issued $50,000 worth of 8%, 20-year bonds for $52,950. These bonds sold at ________.
14. Question :Wok ' Roll, Inc. issued $50,000 worth of 8%, 20-year bonds for $52,950. How much cash will bondholders receive when the bonds mature? (Assume the final interest payment has already been made separately.)
15. Question :Buzz Corporation issued $50,000 worth of 10-year, 8% bonds for $48,359.66. The $50,000 is called the ________.
16. Question :Buzz Corporation issued $50,000 worth of 10-year, 8% bonds for $48,359.66. The 8% is the ________.
17. Question :On January 1, 2011, Dew Drop Inn borrowed $80,000 at 8% interest. The loan will be repaid with equal annual installment payments of $8,900 made on the last day of each year, which is the companys yearend. Notes payable at December 31, 2011 equals ________.
18. Question :On October 31, 2011, Bondable, Inc. issued $20,000 of 10-year, 6% bonds at 100. The bonds pay interest annually on October 31. On its statement of cash flows for the year ended December 31, 2011, Bondable will show Cash paid for interest of ________.
19. Question :On November 30, 2011, Just in Thyme, Inc. issued $10,000 of 20-year, 9% bonds at 100. The bonds pay interest semiannually on May 31 and November 30. On its statement of cash flows for the year ended December 31, 2011, Just in Thyme will show Cash paid for interest of ________.
20. Question :Positive financial leverage occurs when a company ________.