Questions from Financial Accounting

Q: Bernie Ebbers, the CEO of WorldCom, a major telecommunications company

Bernie Ebbers, the CEO of WorldCom, a major telecommunications company, was having personal financial troubles. Ebbers pledged a large stake of his WorldCom stock as security for some personal loans....

Q: Epstein Engineering Inc. began operations on January 5, 20Y8,

Epstein Engineering Inc. began operations on January 5, 20Y8, with the issuance of 500,000 shares of $80 par common stock. The sole stockholders of Epstein Engineering Inc. are Barb Abrams and Dr. Amb...

Q: Tommy Gunn is a division manager for K-Cern Inc.,

Tommy Gunn is a division manager for K-Cern Inc., a small pharmaceutical company. Tommy’s division has been working on a new drug that has the potential to revolutionize the treatment of skin cancer....

Q: Lou Hoskins and Shirley Crothers are organizing Red Lodge Metals Unlimited Inc

Lou Hoskins and Shirley Crothers are organizing Red Lodge Metals Unlimited Inc. to undertake a high-risk gold-mining venture in Canada. Lou and Shirley tentatively plan to request authorization for 40...

Q: Imaging Inc., a developer of radiology equipment, has stock outstanding

Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 40,000 shares of cumulative preferred 2% stock, $75 par, and 100,000 shares of $50 par common. During its first four...

Q: In teams, select a public company that interests you. Obtain

In teams, select a public company that interests you. Obtain the company’s most recent annual report on Form 10-K. The Form 10-K is a company’s annually required filing with the Securities and Exchang...

Q: If you asked your broker to buy you a 12% bond

If you asked your broker to buy you a 12% bond when the market interest rate for such bonds was 11%, would you expect to pay more or less than the face amount for the bond? Explain.

Q: Fleeson Company needs additional funds to purchase equipment for a new production

Fleeson Company needs additional funds to purchase equipment for a new production facility and is considering either issuing bonds payable or borrowing the money from a local bank in the form of an in...

Q: On the first day of the fiscal year, Shiller Company borrowed

On the first day of the fiscal year, Shiller Company borrowed $85,000 by giving a seven-year, 7% installment note to Soros Bank. The note requires annual payments of $15,772, with the first payment oc...

Q: On January 1, Year 1, Luzak Company issued a $

On January 1, Year 1, Luzak Company issued a $120,000, five-year, 6% installment note to McGee Bank. The note requires annual payments of $28,488, beginning on December 31, Year 1. Journalize the entr...