All Related Questions of Debentures

Q: Recently, your uncle, Carlos Beltran, who knows that you

Recently, your uncle, Carlos Beltran, who knows that you always have your eye out for a profitable investment, has discussed the possibility of your purchasing some corporate bonds. He suggests that y...

Q: Kobayashi Corporation reports in the current liability section of its statement of

Kobayashi Corporation reports in the current liability section of its statement of financial position at December 31, 2014 (its year-end), short-term obligations of $15,000,000, which includes the c...

Q: On January 1, 2013, when its $30 par value

On January 1, 2013, when its $30 par value common stock was selling for $80 per share, Plato Corp. issued $10,000,000 of 8% convertible debentures due in 20 years. The conversion option allowed the ho...

Q: On January 1, 2014, Gottlieb Corporation issued $4,

On January 1, 2014, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be co...

Q: The Simon Corporation issued 10-year, $5,000

The Simon Corporation issued 10-year, $5,000,000 par, 7% callable convertible subordinated debentures on January 2, 2014. The bonds have a par value of $1,000, with interest payable annually. The curr...

Q: Four years after issue, debentures with a face value of $

Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are tendered for conversion into 80,000 ordinary shares immediately after an interest payment date. At tha...

Q: Four years after issue, debentures with a face value of $

Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are tendered for conversion into 80,000 shares of common stock immediately after an interest payment date....

Q: Ashley Company is a young and growing producer of electronic measuring instruments

Ashley Company is a young and growing producer of electronic measuring instruments and technical equipment. You have been retained by Ashley to advise it in the preparation of a statement of cash flow...

Q: You have just started work for Warren Co. as part of

You have just started work for Warren Co. as part of the controller’s group involved in current financial reporting problems. Jane Henshaw, controller for Warren, is interested in your accounting back...

Q: “Earnings per share” (EPS) is the most featured

“Earnings per share” (EPS) is the most featured, single financial statistic about modern corporations. Daily published quotations of stock prices have recently been expanded to include for many securi...

Q: Patel, CPA, has completed the audit of the financial statements

Patel, CPA, has completed the audit of the financial statements of Bellamy Corporation as of and for the year ended December 31, 2011. Patel also audited and reported on the Bellamy financial statemen...

Q: Your client, Red Horse Inc., prepared the following schedule for

Your client, Red Horse Inc., prepared the following schedule for long term debt for the audit of financial statements for the year ended December 31, 2011: Required a. What type of evidence would you...

Q: An outstanding issue of Public Express Airlines debentures has a call provision

An outstanding issue of Public Express Airlines debentures has a call provision attached. The total principal value of the bonds is $250 million, and the bonds have an annual coupon rate of 9 percent....

Q: When the Beacon Computer Company filed for bankruptcy under Chapter 7 of

When the Beacon Computer Company filed for bankruptcy under Chapter 7 of the U.S. bankruptcy code, it had the following balance sheet information: Assuming there are no legal fees associated with t...

Q: When the Master Printing Company filed for bankruptcy, it filed under

When the Master Printing Company filed for bankruptcy, it filed under Chapter 11 of the U.S. bankruptcy code. Key information is shown here: As a trustee, what reorganization plan would you accept?...

Q: Cando Communications (CC) is a public company that owns and

Cando Communications (CC) is a public company that owns and operates 10 broadcast television stations and several specialty cable channels, 10 newspapers (including me International Post), and many ot...

Q: The Howe Computer Company has grown rapidly during the past 5 years

The Howe Computer Company has grown rapidly during the past 5 years. Recently, its commercial bank urged the company to consider increasing its permanent financing. Its bank loan under a line of credi...

Q: O’Brien Computers Inc. needs to raise $35 million to begin

O’Brien Computers Inc. needs to raise $35 million to begin producing a new microcomputer. O’Brien’s straight, nonconvertible debentures currently yield 12%. Its stock sells for $38 per share, the last...

Q: The following appeared in the October 15, 2018, issue of

The following appeared in the October 15, 2018, issue of the Financial Smarts Journal: This announcement is not an offer of securities for sale or an offer to buy securities. New Issue ………………………………………...

Q: Disaster Airlines is a firm in severe financial distress. The firm

Disaster Airlines is a firm in severe financial distress. The firm can no longer pay its bills on time and it is far behind on payments to its banks and long-term debt holders. The firm has decided to...

Q: You own $25,000 in subordinated debt of Local Crossings

You own $25,000 in subordinated debt of Local Crossings, Inc. which declared bankruptcy on May 15, 2018 through a Chapter 7 filing. Local Crossings’ balance sheet at the time of the bankruptcy filing...

Q: WorldGone, Inc. declared bankruptcy on September 25, 2018 through

WorldGone, Inc. declared bankruptcy on September 25, 2018 through a Chapter 7 filing. WorldGone’s balance sheet at the time of the bankruptcy filing is listed below. The accrued wage...

Q: Dumars Corporation reports in the current liability section of its balance sheet

Dumars Corporation reports in the current liability section of its balance sheet at December 31, 2012 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% l...

Q: Kobayashi Corporation reports in the current liability section of its statement of

Kobayashi Corporation reports in the current liability section of its statement of financial position at December 31, 2012 (its year-end), short-term obligations of $15,000,000, which includes the cur...

Q: Four years after issue, debentures with a face value of $

Four years after issue, debentures with a face value of $1,000,000 and book value of $960,000 are tendered for conversion into 80,000 shares of common stock immediately after an interest payment date....

Q: Dumars Corporation reports in the current liability section of its balance sheet

Dumars Corporation reports in the current liability section of its balance sheet at December 31, 2012 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% l...

Q: Kobayashi Corporation reports in the current liability section of its statement of

Kobayashi Corporation reports in the current liability section of its statement of financial position at December 31, 2012 (its year-end), short-term obligations of $15,000,000, which includes the cur...

Q: On January 1, 2012, when its $30 par value

On January 1, 2012, when its $30 par value common stock was selling for $80 per share, Bartz Corp. issued $10,000,000 of 8% convertible debentures due in 20 years. The conversion option allowed the ho...

Q: On January 1, 2011, Trillini Corporation issued $3,

On January 1, 2011, Trillini Corporation issued $3,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be co...

Q: The Ottey Corporation issued 10-year, $4,000

The Ottey Corporation issued 10-year, $4,000,000 par, 7% callable convertible subordinated debentures on January 2, 2012. The bonds have a par value of $1,000, with interest payable annually. The curr...

Q: “Earnings per share” (EPS) is the most featured

“Earnings per share” (EPS) is the most featured, single financial statistic about modern corporations. Daily published quotations of stock prices have recently been expanded to include for many securi...

Q: Wynn Resorts owns a variety of popular gaming resorts. Its annual

Wynn Resorts owns a variety of popular gaming resorts. Its annual report contained the following information: Debenture Conversions Our convertible debentures are currently convertible at each holder...

Q: It was one of Morse’s most puzzling cases. That morning

It was one of Morse’s most puzzling cases. That morning Rupert Thorndike, the autocratic CEO of Thorndike Oil, was found dead in a pool of blood on his bedroom floor. He had been sh...

Q: Elixir Corporation has just filed for bankruptcy. Elixir is a holding

Elixir Corporation has just filed for bankruptcy. Elixir is a holding company whose assets consist of real estate worth $80 million and 100% of the equity of its two operating subsidiaries. It is fina...

Q: Fortune Corporation used debentures with a par value of $625,

Fortune Corporation used debentures with a par value of $625,000 to acquire 100 percent of Sorden Company’s net assets on January 1, 20X2. On that date, the fair value of the bonds i...

Q: Bigtime Industries Inc. entered into a business combination agreement with Hydrolized

Bigtime Industries Inc. entered into a business combination agreement with Hydrolized Chemical Corporation (HCC) to ensure an uninterrupted supply of key raw materials and to realize certain economies...

Q: Parent Corporation owns 100% of Subsidiary Corporation’s single class of stock

Parent Corporation owns 100% of Subsidiary Corporation’s single class of stock and $2 million of Subsidiary debentures. Parent purchased the debentures in small blocks from various unrelated parties a...

Q: Six years ago, Leticia, Monica, and Nathaniel organized Lemona

Six years ago, Leticia, Monica, and Nathaniel organized Lemona Corporation to develop and sell computer software. Each individual contributed $10,000 to Lemona in exchange for 1,000 shares of Lemona s...

Q: Niendorf Incorporated needs to raise $25 million to construct production facilities

Niendorf Incorporated needs to raise $25 million to construct production facilities for a new type of USB memory device. The firm’s straight nonconvertible debentures currently yield 9%. Its stock sel...

Q: Fifteen years ago, Roop Industries sold $400 million of convertible

Fifteen years ago, Roop Industries sold $400 million of convertible bonds. The bonds had a 40-year maturity, a 5.75% coupon rate, and paid interest annually. They were sold at their $1,000 par value....

Q: The Howland Carpet Company has grown rapidly during the past 5 years

The Howland Carpet Company has grown rapidly during the past 5 years. Recently, its commercial bank urged the company to consider increasing its permanent financing. Its bank loan under a line of cred...

Q: Kimberly MacKenzie—president of Kim’s Clothes Inc., a medium-

Kimberly MacKenzie—president of Kim’s Clothes Inc., a medium-sized manufacturer of women’s casual clothing—is worried. Her firm...

Q: The following balance sheet represents Boles Electronics Corporation’s position at the time

The following balance sheet represents Boles Electronics Corporation’s position at the time it filed for bankruptcy (in thousands of dollars): The mortgage bonds are secured by the p...

Q: Southwestern Wear Inc. has the following balance sheet: /

Southwestern Wear Inc. has the following balance sheet: The trustee’s costs total $281,250, and the firm has no accrued taxes or wages. The debentures are subordinated only to the no...

Q: At the time it defaulted on its interest payments and filed for

At the time it defaulted on its interest payments and filed for bankruptcy, the McDaniel Mining Company had the balance sheet shown below (in thousands of dollars). The court, after trying unsuccessfu...

Q: What is the difference between the following? a) The

What is the difference between the following? a) The indenture and the trustee b) The coupon rate and the current rate of interest c) Debentures and secured bonds d) A sinking fund and a call feature...

Q: Recently, your Uncle Carlos Beltran, who knows that you always

Recently, your Uncle Carlos Beltran, who knows that you always have your eye out for a profitable investment, has discussed the possibility of your purchasing some corporate bonds. He suggests that yo...

Q: Ashley Company is a young and growing producer of electronic measuring instruments

Ashley Company is a young and growing producer of electronic measuring instruments and technical equipment. You have been retained by Ashley to advise it in the preparation of a statement of cash flow...

Q: Founded in the early 1980s, the Vermont Teddy Bear Co.

Founded in the early 1980s, the Vermont Teddy Bear Co. designs and manufactures American-made teddy bears and markets them primarily as gifts called Bear-Grams or Teddy Bear-Grams. Bear-Grams are pers...

Q: Stage Corporation has both convertible preferred stock and convertible debentures outstanding at

Stage Corporation has both convertible preferred stock and convertible debentures outstanding at the end of 20X3. The annual cash payment to the preferred shareholders and to the bondholders is the sa...

Q: Select the correct answer for each of the following questions.

Select the correct answer for each of the following questions. Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct? The prospectus...

Q: Tanzanite Corporation issued $500,000 of 7% debentures to

Tanzanite Corporation issued $500,000 of 7% debentures to yield 11%, receiving $424,624. Interest is payable semiannually, and the bonds mature in five years. 1. What entries would be made by Tanzanit...

Q: Clarkston Inc. issued $1,000,000 of convertible

Clarkston Inc. issued $1,000,000 of convertible 10-year, 11% bonds on July 1, 2012. The interest is payable semiannually on January 1 and July 1. The discount in connection with the issue was $9,500,...

Q: Gerona Company authorized the sale of $300,000 of 10

Gerona Company authorized the sale of $300,000 of 10%, 10-year debentures on January 1, 2008. Interest is payable on January 1 and July 1. The entire issue was sold on April 1, 2008, at 103 plus accru...

Q: Von Surf Co. issued $1,200,000 of

Von Surf Co. issued $1,200,000 of convertible 10-year debentures on July 1, 2012. The debentures provide for 8% interest payable semiannually on January 1 and July 1. The discount in connection with t...

Q: Kaufman Company’s balance sheet follows: / / Required

Kaufman Company’s balance sheet follows: Required a. Compute the debt ratio. b. Compute the debt/equity ratio. c. Compute the ratio of total debt to tangible net worth. d. Comment...

Q: Baldwin Corporation made a public offering of $25,000,

Baldwin Corporation made a public offering of $25,000,000 of convertible debentures and registered the offering with the SEC. The registration statement contained financial statements certified by Ada...

Q: Refer to Samsung’s balance sheet in Appendix A. If it made

Refer to Samsung’s balance sheet in Appendix A. If it made an adjustment for unpaid wages at year-end, where would the accrued wages be reported on its balance sheet? Samsungâ...

Q: Refer to Samsung’s most recent balance sheet in Appendix A. Identify

Refer to Samsung’s most recent balance sheet in Appendix A. Identify and list its nine current assets. Samsung’s Balance Sheet from Appendix A: /

Q: Refer to Samsung’s 2013 balance sheet in Appendix A near the end

Refer to Samsung’s 2013 balance sheet in Appendix A near the end of the book. Confirm that its total assets equal its total liabilities plus total equity. Samsung’...

Q: Refer to the December 31, 2013, financial statements of Samsung

Refer to the December 31, 2013, financial statements of Samsung in Appendix A. Does Samsung report its accounts receivable as a current or noncurrent asset? Does Samsung report its GOOGLE accounts rec...

Q: Samsung’s balance sheet in Appendix A reports the change in cash and

Samsung’s balance sheet in Appendix A reports the change in cash and equivalents for the year ended December 31, 2013. Identify the cash generated (or used) by operating activities,...

Q: Refer to the December 31, 2013, balance sheet of Samsung

Refer to the December 31, 2013, balance sheet of Samsung in Appendix A. What long-term assets discussed in this chapter are reported by the company? Samsung’s Balance Sheet from App...

Q: Refer to the financial statements for Samsung in Appendix A. How

Refer to the financial statements for Samsung in Appendix A. How much were its cash payments for treasury stock purchases for the year ended December 31, 2013? Samsung’s Financial S...

Q: By what amount did Samsung’s long-term borrowings increase or decrease

By what amount did Samsung’s long-term borrowings increase or decrease in 2013? Samsung’s Financial Statements from Appendix A:

Q: Refer to the statement of cash flows for Samsung in Appendix A

Refer to the statement of cash flows for Samsung in Appendix A. For the year ended December 31, 2013, what was the amount for repayment of long-term borrowings and debentures? Samsungâ€
...

Q: Refer to Samsung’s 2013 statement of cash flows in Appendix A.

Refer to Samsung’s 2013 statement of cash flows in Appendix A. List its cash flows from operating activities, investing activities, and financing activities. Samsungâ€
...

Q: Refer to Samsung’s statement of cash flows in Appendix A. What

Refer to Samsung’s statement of cash flows in Appendix A. What investing activities result in cash outflows for the year ended December 31, 2013? List items and amounts. Samsung&aci...

Q: Refer to Samsung’s financial statements in Appendix A. Compute its cost

Refer to Samsung’s financial statements in Appendix A. Compute its cost of goods available for sale for the year ended December 31, 2013. Samsung’s Financial State...

Q: Refer to Samsung’s financial statements in Appendix A. What percent of

Refer to Samsung’s financial statements in Appendix A. What percent of its current assets are inventory as of December 31, 2013 and 2012? Samsung’s Financial State...

Q: Refer to the financial statements of Samsung in Appendix A. What

Refer to the financial statements of Samsung in Appendix A. What does Samsung title its accounts receivable on its consolidated balance sheet? What are Samsung’s accounts receivable...

Q: Refer to Apple’s financial statements in Appendix A to answer the following

Refer to Apple’s financial statements in Appendix A to answer the following. 1. Identify the items, if any, that make up Apple’s long-term debt as reported on its balance sheet at September 28, 2013....

Q: Refer to Samsung’s financial statements in Appendix A. Compute its debt

Refer to Samsung’s financial statements in Appendix A. Compute its debt ratio as of December 31, 2013, and December 31, 2012. Samsung’s Financial Statements from A...

Q: Use Samsung’s financial statements in Appendix A to compute its return on

Use Samsung’s financial statements in Appendix A to compute its return on total assets for fiscal year ended December 31, 2013. Samsung’s Financial Statements from...

Q: This (adapted) advertisement appeared in the Wall Street Chronicle.

This (adapted) advertisement appeared in the Wall Street Chronicle. (Note: A subordinated debenture is an unsecured bond payable whose rights are less than the rights of other bondholders.) Require...

Q: Distinguish between debentures and mortgage bonds.

Distinguish between debentures and mortgage bonds.

Q: Information taken from a Sears, Roebuck and Company annual report follows

Information taken from a Sears, Roebuck and Company annual report follows. Required: 1. How much interest expense did the company record during Year 2 on the 7% debentures? How much of the original...

Q: The following information was taken from the financial statements of ALZA Corporation

The following information was taken from the financial statements of ALZA Corporation. On July 28, 2000, ALZA completed a private offering of the 3% Zero Coupon Convertible Subordinated Debentures, wh...

Q: On January 1, 2017, 3Way Energy issued $200 million

On January 1, 2017, 3Way Energy issued $200 million of 15-year, floating-rate debentures at par value. The debentures pay interest on June 30 and December 31 of each year. The floating interest rate i...

Q: [A] Aon Corporation’s Mezzanine Preferred Stock In its 2002 annual

[A] Aon Corporation’s Mezzanine Preferred Stock In its 2002 annual report to shareholders, Aon Corporation described its mandatorily redeemable preferred stock as follows: In January...

Q: On January 1, 2012, when its $30 par-

On January 1, 2012, when its $30 par-value common stock was selling for $80 per share, Gierach Corporation issued $10 million of 4% convertible debentures due in 10 years. The conversion option allowe...

Q: The Shareholders’ Equity section of Holiday Roads Company’s balance sheet shows:

The Shareholders’ Equity section of Holiday Roads Company’s balance sheet shows: Net income for 2017 was $1,700,000, preferred stock dividends were $200,000, and...

Q: Using the resources at your campus or public library or on the

Using the resources at your campus or public library or on the Internet, find the information requested below. a. Select any two convertible debentures (notes or bonds) and determine the conversion ra...

Q: Megalopolis Bank has the following balance sheet and income statement.

Megalopolis Bank has the following balance sheet and income statement. For Megalopolis, calculate: a. Return on equity b. Return on assets c. Asset utilization d. Equity multiplier e. Profit margin...

Q: Dudley Bank has the following balance sheet and income statement.

Dudley Bank has the following balance sheet and income statement. For Dudley Bank, calculate: a. Return on equity b. Return on assets c. Asset utilization d. Equity multiplier e. Profit margin f....

Q: What is the capital conservation buffer? How would this buffer affect

What is the capital conservation buffer? How would this buffer affect your answers in Problem 6? Data from Problem 6: National Bank has the following balance sheet (in millions) and has no off-balan...

Q: Repurchase agreements are listed as both assets and liabilities in Table 12

Repurchase agreements are listed as both assets and liabilities in Table 12–1. How can an account be both an asset and a liability? Table 12–1:

Q: Smallville Bank has the following balance sheet, rates earned on its

Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. If the bank earns $120,000 in noninterest income, incurs $80,000 in noninterest expen...

Q: Community Bank has the following balance sheet, rates earned on its

Community Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities. If the bank earns $159,000 in noninterest income, incurs $306,000 in noninterest expen...

Q: National Bank has the following balance sheet (in millions) and

National Bank has the following balance sheet (in millions) and has no off-balance-sheet activities. a. What is the CET1 risk-based ratio? b. What is the Tier I risk-based capital ratio? c. What is...

Q: Exhibit 16.13 presents the comparative balance sheets for Plainview Corporation

Exhibit 16.13 presents the comparative balance sheets for Plainview Corporation for 2013 and 2014. The following additional information relates to 2014 activities: (1) The Retained Earnings account ch...

Q: Exhibit 11.15 presents excerpts from the notes to the financial

Exhibit 11.15 presents excerpts from the notes to the financial statements of Home Supply Company. a. The amounts shown for Debentures, Notes, and the Medium-Term Notes appear as the same amounts on F...

Q: Dumars Corporation reports in the current liability section of its balance sheet

Dumars Corporation reports in the current liability section of its balance sheet at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the current portion of 12% l...

Q: Kobayashi Corporation reports in the current liability section of its statement of

Kobayashi Corporation reports in the current liability section of its statement of financial position at December 31, 2017 (its year-end), short-term obligations of $15,000,000, which includes the cur...

Q: The Simon Corporation issued 10-year, $5,000

The Simon Corporation issued 10-year, $5,000,000 par, 7% callable convertible subordinated debentures on January 2, 2017. The bonds have a par value of $1,000, with interest payable annually. The curr...

Q: On January 1, 2016, when its $30 par value

On January 1, 2016, when its $30 par value common stock was selling for $80 per share, Plato Corp. issued $10,000,000 of 8% convertible debentures due in 20 years. The conversion option allowed the ho...

Q: On January 1, 2017, Gottlieb Corporation issued $4,

On January 1, 2017, Gottlieb Corporation issued $4,000,000 of 10-year, 8% convertible debentures at 102. Interest is to be paid semiannually on June 30 and December 31. Each $1,000 debenture can be co...

Q: Ashley Company is a young and growing producer of electronic measuring instruments

Ashley Company is a young and growing producer of electronic measuring instruments and technical equipment. You have been retained by Ashley to advise it in the preparation of a statement of cash flow...

Q: Pintime Industries Inc. entered into a business combination agreement with Sydrolized

Pintime Industries Inc. entered into a business combination agreement with Sydrolized Chemical Corporation (SCC) to ensure an uninterrupted supply of key raw materials and to realize certain economies...

Q: Planter Corporation used debentures with a par value of $625,

Planter Corporation used debentures with a par value of $625,000 to acquire 100 percent of Sorden Company’s net assets on January 1, 20X2. On that date, the fair value of the bonds i...

Q: Using the data presented in E1-13, determine the amount

Using the data presented in E1-13, determine the amount Planter Corporation would record as a gain on bargain purchase and prepare the journal entry Planter would record at the time of the exchange if...

Q: Select the correct answer for each of the following questions.

Select the correct answer for each of the following questions. 1. Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct? a. The prospectus is a...

Q: Mark Williams, CPA, was engaged by Jackson Financial Development

Mark Williams, CPA, was engaged by Jackson Financial Development Company to audit the financial statements of Apex Construction Company, a small closely held corporation. Williams was told when he wa...

Q: You are auditing the financial statements for your new client, Paper

You are auditing the financial statements for your new client, Paper Packaging Corporation, a manufacturer of paper containers, for the year ended March 31, 2019. Paper Packaging is a public company....

Q: What information should be requested by the auditors from the trustee responsible

What information should be requested by the auditors from the trustee responsible for an issue of debentures payable?

Q: Roscoe & Jones, Ltd., a CPA firm in Silver Bell

Roscoe & Jones, Ltd., a CPA firm in Silver Bell, Arizona, has completed the audit of the financial statements of Excelsior Corporation as of, and for, the year ended December 31, 20X1. Findings relate...

Q: On 1 January 20X0 Walpole Ltd acquired 90% of the ordinary

On 1 January 20X0 Walpole Ltd acquired 90% of the ordinary shares of a French subsidiary Paris SA. At that date the balance on the retained earnings of Paris SA was €10,000. The non-c...

Q: Amalgamated Engineering plc makes specialized machinery for several industries. In recent

Amalgamated Engineering plc makes specialized machinery for several industries. In recent years, the company has faced severe competition from overseas businesses, and its sales volume has hardly chan...

Q: The following trial balance was extracted from the books of Old NV

The following trial balance was extracted from the books of Old NV on 31 December 20X1. Note of information not taken into the trial balance data: (a) Provide for: (i) An audit fee of â‚&...

Q: The statements of financial position, cash flows, income and movements

The statements of financial position, cash flows, income and movements of non-current assets of Dragon plc for the year ended 30 September 20X6 are set out below: (ii) Statement of income (extract)...

Q: Quickserve plc is a food wholesale company. Its financial statements for

Quickserve plc is a food wholesale company. Its financial statements for the years ended 31 December 20X8 and 20X9 are as follows: Required: (a) Describe the concerns of the following users and how...

Q: The following are the accounts of Bouncy plc, a company that

The following are the accounts of Bouncy plc, a company that manufactures playground equipment, for the year ended 30 November 20X6. The directors are considering two schemes to raise £...

Q: Sally Gorden seeks your assistance to decide whether she should invest in

Sally Gorden seeks your assistance to decide whether she should invest in Ruby plc or Sapphire plc. Both companies are quoted on the London Stock Exchange. Their shares were listed on 20 June 20X4 as...

Q: (a) Prepare a value added statement to be included in

(a) Prepare a value added statement to be included in the corporate report of Hythe plc for the year ended 31 December 20X6, including the comparatives for 20X5, using the information given below: (...

Q: The statements of financial position of Radar plc at 30 September were

The statements of financial position of Radar plc at 30 September were as follows: The following information is available: (i) An impairment review of the investments disclosed that there had been a...

Q: Shown below are the summarized final accounts of Martel plc for the

Shown below are the summarized final accounts of Martel plc for the last two financial years: Summarized statement of comprehensive income for the year ending 31 December Additional information: 1...

Q: The financial statements of Saturn plc have been prepared as follows:

The financial statements of Saturn plc have been prepared as follows: Further information: (a) Extract from statement of income (b) Operating expenses written off in the year include the following...

Q: The finance director of Toy plc has been asked by a shareholder

The finance director of Toy plc has been asked by a shareholder to explain items that appear in the current cost statement of comprehensive income for the year ended 31.8.20X9 and the statement of fin...

Q: The draft statement of financial position of Telin plc at 30 September

The draft statement of financial position of Telin plc at 30 September 20X5 was as follows: Preference shares of the company were originally issued at a premium of 2p per share. The directors of the...

Q: A summary of the statement of financial position of Doxin plc,

A summary of the statement of financial position of Doxin plc, as at 31 December 20X0, is given below: During 20XI, the company: (i) issued 200,000 ordinary shares of £I each at a premi...

Q: Delta Ltd has been developing a lightweight automated wheelchair. The research

Delta Ltd has been developing a lightweight automated wheelchair. The research costs written off have been far greater than originally estimated and the equity and preference capital has been eroded a...

Q: Olive A/S, incorporated with an authorised capital consisting of

Olive A/S, incorporated with an authorised capital consisting of one million ordinary shares of €1 each, employs 64 persons, of whom 42 work at the factory and the rest at the head of...

Q: On 1 October 20X1, Little Raven plc issued 50,000

On 1 October 20X1, Little Raven plc issued 50,000 debentures, with a par value of £100 each, to investors at £80 each. The debentures are redeemable at par on 30 September 20...

Q: George plc will need to adopt IFRS 9 from accounting periods beginning

George plc will need to adopt IFRS 9 from accounting periods beginning on or after 1 January 2018. George has three different instruments whose accounting George is concerned will change as a result o...

Q: Rumpus plc is a public listed manufacturing company. Its summarized consolidated

Rumpus plc is a public listed manufacturing company. Its summarized consolidated financial statements for the year ended 31 March 2014 (and 2013 comparatives where relevant) are as follows: The fo...

Q: Delta Ltd has been developing a lightweight automated wheelchair. The research

Delta Ltd has been developing a lightweight automated wheelchair. The research costs written off have been far greater than originally estimated and the equity and preference capital has been eroded a...

Q: The following facts apply to a convertible bond making semiannual

The following facts apply to a convertible bond making semiannual payments:Conversion price …………………………………………………………………… $37/shareCoupon rate …………………………………………………………………………………. 2.6%Par value …………………………………...

Q: The following facts apply to a convertible bond making semiannual

The following facts apply to a convertible bond making semiannual payments:Conversion price …………………………………………………………………… $37/shareCoupon rate …………………………………………………………………………………. 2.6%Par value …………………………………...

Q: Cox Media Corporation pays an 11 percent coupon rate on debentures that

Cox Media Corporation pays an 11 percent coupon rate on debentures that are due in 10 years. The current yield to maturity on bonds of similar risk is 8 percent. The bonds are currently callable at $1...

Q: Describe the basic features of each of the following types of bonds

Describe the basic features of each of the following types of bonds: a. Mortgage bonds b. Debentures c. Subordinated debentures d. Equipment trust certificates e. Collateral trust bonds f. Incom...

Q: Suppose a company simultaneously sold two long-term debt issues at

Suppose a company simultaneously sold two long-term debt issues at par: 9⅛ percent senior debentures and 9⅜ percent subordinated debentures. What risk-return trade-off would be faced by an investor wh...

Q: Disney Enterprises issued 7.55% senior debentures (bonds)

Disney Enterprises issued 7.55% senior debentures (bonds) on July 15, 1993, with a 100-year maturity (that is, due on July 15, 2093). Suppose an investor purchased one of these bonds on July 15, 2003...

Q: Murphy’s Brewhouse was a rapidly expanding chain of home-brew bars

Murphy’s Brewhouse was a rapidly expanding chain of home-brew bars. The beer was not very good, but hopes were high when the company went public three years ago, because of founder/owner Kevin Murphy’...

Q: Recently the high and low market prices of Canadian Pacific Limited’s debentures

Recently the high and low market prices of Canadian Pacific Limited’s debentures (see problem 1) were $790 and $475, respectively. Determine the yield-to-maturity of one of these debentures if it was...

Q: BCC has issued 8⅛ percent debentures that will mature on July

BCC has issued 8⅛ percent debentures that will mature on July 15, 2036. Assume that interest is paid and compounded annually. If an investor purchased a $1,000 denomination bond for $1,025 on July 15,...

Q: In 2006, BCC issued 8⅝ percent debentures that will mature

In 2006, BCC issued 8⅝ percent debentures that will mature on December 1, 2046. a. If an investor purchased one of these bonds ($1,000 denomination) on December 1, 2016, for $1,050, determine the yie...

Q: Consider again the BCC 8⅛ percent debentures that mature on July

Consider again the BCC 8⅛ percent debentures that mature on July 15, 2036 (see problem 6). Determine the yield to call if the bonds are called on July 15, 2022, at $1,016.55.

Q: 1. Which of the following statements concerning bonds is incorrect?

1. Which of the following statements concerning bonds is incorrect? a. They involve blended payments of principal and interest. b. They have a fixed maturity date, at which time the issuer repays the...

Q: Allied Apparel Company received a large order from Websters Department Stores,

Allied Apparel Company received a large order from Websters Department Stores, which operates a chain of approximately 300 popular-priced department stores located primarily in the New Englandâ&...

Q: The Anaya Corporation is a leader in artificial intelligence research. Anaya’s

The Anaya Corporation is a leader in artificial intelligence research. Anaya’s present capital structure consists of common stock (30 million shares) and debt ($250 million with an interest rate of 15...

Q: University Technologies, Inc. (UTI) has a current capital

University Technologies, Inc. (UTI) has a current capital structure consisting of 10 million shares of common stock, $200 million of first-mortgage bonds with a coupon interest rate of 13 percent, and...

Q: Ellington’s Cabaret is planning a major expansion that will require $95

Ellington’s Cabaret is planning a major expansion that will require $95 million of new financing. Ellington’s currently has a capital structure consisting of $400 million of common equity (with a cost...

Q: The Marietta Corporation, a large manufacturer of mufflers, tailpipes,

The Marietta Corporation, a large manufacturer of mufflers, tailpipes, and shock absorbers, is currently carrying out its financial planning for next year. In about two weeks, at the next meeting of t...

Q: Colbyco Industries has a target capital structure of 60 percent common equity

Colbyco Industries has a target capital structure of 60 percent common equity, 30 percent debt, and 10 percent preferred stock. The cost of retained earnings is 15 percent, and the cost of new equity...

Q: The White Corporation makes small Bozo replicas for sale in the growing

The White Corporation makes small Bozo replicas for sale in the growing Austin market. The firm’s capital structure consists of 60 percent common equity, 10 percent preferred stock, and 30 percent lon...

Q: Owens Enterprises is in the process of determining its capital budget for

Owens Enterprises is in the process of determining its capital budget for the next fiscal year. The firm’s current capital structure, which it considers to be optimal, is contained i...

Q: Jenkins Resources Inc. has the following capital structure:

Jenkins Resources Inc. has the following capital structure: Financing Source………….…..Proportion of Capital Structure Debentures (9% coupon, $1,000 par value, 12-year maturity)…………….…………………...

Q: Consider Failures Galore Inc. (Tables 23.11 and 23

Consider Failures Galore Inc. (Tables 23.11 and 23.12). a. If total liquidation proceeds are $5.95 million, what is the distribution of these proceeds among the various creditors of Failures Galore?...

Q: Go-for-Broke Company is being liquidated under Chapter 7

Go-for-Broke Company is being liquidated under Chapter 7 of the bankruptcy code. When it filed for bankruptcy, its balance sheet was as follows: *All accrued wages must be paid out of the liquidatio...

Q: The LeMonde Corporation has debentures outstanding (par value ¼ $1

The LeMonde Corporation has debentures outstanding (par value ¼ $1,000) that are convertible into the company’s common stock at a price of $25 per share. The convertibles have a coupon interest rate o...

Q: Automatic Data Processing issued $150 million of 6½ percent convertible

Automatic Data Processing issued $150 million of 6½ percent convertible debentures maturing in 2020. The debentures are convertible into common stock at $83.45 a share. The company’s common stock was...

Q: Shaw Products Company, whose present balance sheet is summarized here,

Shaw Products Company, whose present balance sheet is summarized here, is considering issuing $100 million of 6 percent subordinated debentures (par value = $1,000), which are convertible into common...

Q: The capital structure of Whitefield Mills Inc. is as follows:

The capital structure of Whitefield Mills Inc. is as follows: Long-term debt………………………………………..……………$250 Million Common stock, $1 par………..………………..25 million Contributed capital in excess of par value……...

Q: You own 10 Bitterroot Industries Inc. 8 percent convertible debentures maturing

You own 10 Bitterroot Industries Inc. 8 percent convertible debentures maturing in 2030. The conversion ratio of the debentures is 30, and the debentures are callable at $1,070 each. You bought the de...

Q: The Findlay Company has debentures outstanding (par value ¼ $1

The Findlay Company has debentures outstanding (par value ¼ $1,000) that are convertible into common stock at a price of $50 per share. The convertible bonds have a coupon interest rate of 9 percent a...

Q: Nullcom Inc. has debentures (face value ¼ $1,

Nullcom Inc. has debentures (face value ¼ $1,000) outstanding that are convertible into common stock at a price of $40 per share. The debentures pay an interest rate of 9 percent per annum and have a...

Q: The following balance sheet represents Boles Electronics Corporation’s position at the time

The following balance sheet represents Boles Electronics Corporation’s position at the time it filed for bankruptcy (in thousands of dollars): The mortgage bonds are secured by the...

Q: Distinguish between the following: a. Debentures and mortgage bonds

Distinguish between the following: a. Debentures and mortgage bonds b. Eurobonds, zero-coupon bonds, and junk bonds c. Premium and discount bonds

Q: Charter Corp. has issued 2,500 debentures with a total

Charter Corp. has issued 2,500 debentures with a total principal value of $2,500,000. The bonds have a coupon rate of 7%. a. What dollar amount of interest per bond can an investor expect to receive e...

Q: When the debtor pledges securities as collateral for a loan, problems

When the debtor pledges securities as collateral for a loan, problems can easily arise concerning the quality of care the creditor provided. In Reed v. Central National Bank of Alva, the debtor borro...

Q: Big 10+1 Corp. intends to raise $5 million

Big 10+1 Corp. intends to raise $5 million by one of two financing plans: Plan A: Sell 1,250,000 shares at $4 per share net to the firm. Plan B: Issue $5 million in ten year debentures with a 9 percen...

Q: Stephanie Baker is an audit senior with the public accounting firm of

Stephanie Baker is an audit senior with the public accounting firm of Wilson & Lang. It is February Year 9, and the audit of Canadian Development Limited (CDL) for the year ended December 31, Year 8,...

Q: You, a CPA, have recently accepted a job at the

You, a CPA, have recently accepted a job at the accounting firm of Cat, Scan & Partners, as a manager, and have been assigned the audit of Vision Clothing Inc. (VCI). The partner in charge had bee...

Q: Roman Systems Inc. (RSI) is a Canadian private company

Roman Systems Inc. (RSI) is a Canadian private company. It was incorporated in Year 1 by its sole common shareholder, Marge Roman. RSI manufactures, installs, and provides product support for its line...

Q: †P22-1 Jeopardy Inc.’s CFO has just left

†P22-1 Jeopardy Inc.’s CFO has just left the office of the company president after a meeting about the draft statement of financial position at April 30, 2017, and...

Q: On January 1, 2017, when the fair value of its

On January 1, 2017, when the fair value of its common shares was $80 per share, Hammond Corp. issued $10 million of 8% convertible debentures due in 20 years. The conversion option allowed the holder...

Q: On January 1, 2017, Olson Corporation issued $6 million

On January 1, 2017, Olson Corporation issued $6 million of 10-year, 7% convertible debentures at 104. Investment bankers believe that the debenture would have sold at 102 without the conversion privil...

Q: Ottey Corporation issued $4 million of 10-year, 7

Ottey Corporation issued $4 million of 10-year, 7% callable convertible subordinated debentures on January 2, 2017. The debentures have a face value of $1,000, with interest payable annually. The curr...

Q: Jeremiah Limited issued 10-year, 7% debentures with a

Jeremiah Limited issued 10-year, 7% debentures with a face value of $2 million on January 1, 2010. The proceeds received were $1.7 million. The discount was amortized on the straight-line basis over t...

Q: This case study is taken from Ducker, J., Head,

This case study is taken from Ducker, J., Head, A., McDonnell, B., O'Brien, R. and Richardson, S. (1998), A Creative Approach to Management Accounting: Case Studies in Management Accounting and Contro...

Q: Patel, CPA, has completed the audit of the financial statements

Patel, CPA, has completed the audit of the financial statements of Bellamy Corporation as of and for the year ended December 31, 2019. Patel also audited and reported on the Bellamy financial statemen...

Q: Your client, EKB, Inc., prepared the following schedule for

Your client, EKB, Inc., prepared the following schedule for long-term debt for the audit of financial statements for the year ended December 31, 2019: Required: a. What type of evidence would you ex...

Q: You're an analyst in the finance department of Flyover Corp., a

You're an analyst in the finance department of Flyover Corp., a new firm in a profitable but risky high-tech business. Several growth opportunities have presented themselves recently, but the company...

Q: The Everglo Corp., a manufacturer of cosmetics, is financed with

The Everglo Corp., a manufacturer of cosmetics, is financed with a 50-50 mix of debt and equity. The debt is in the form of debentures, which have a relatively weak indenture. Susan Moremoney, the f...

Q: Harvester Inc. has net income of $75,000,

Harvester Inc. has net income of $75,000,000 and 15,000,000 shares of common stock outstanding. Several years ago it issued 10,000, 8% coupon, 30 year convertible debentures at a par value of $1,000....

Q: On January 1, 2020, when the fair value of its

On January 1, 2020, when the fair value of its common shares was $80 per share, Hammond Corp. issued $10 million of 8% convertible debentures due in 20 years. The conversion option allowed the holder...

Q: On January 1, 2020, Olson Corporation issued $6 million

On January 1, 2020, Olson Corporation issued $6 million of 10-year, 7% convertible debentures at 104. Investment bankers believe that the debenture would have sold at 102 without the conversion privil...

Q: Ottey Corporation issued $4 million of 10-year, 7

Ottey Corporation issued $4 million of 10-year, 7% callable convertible subordinated debentures on January 2, 2020. The debentures have a face value of $1,000, with interest payable annually. The curr...

Q: Jeopardy Inc.'s CFO has just left the office of the

Jeopardy Inc.'s CFO has just left the office of the company president after a meeting about the draft SFP at April 30, 2020, and income statement for the year then ended. (Both are reproduced below.)...

Q: Jeremiah Limited issued 10-year, 7% debentures with a

Jeremiah Limited issued 10-year, 7% debentures with a face value of $2 million on January 1, 2013. The proceeds received were $1.7 million. The discount was amortized on the straight-line basis over t...

Q: Presented below is information for the Hudson Partnership for the year ended

Presented below is information for the Hudson Partnership for the year ended 31 December 2019. Use the information to prepare a statement of cash flows. Cash balance, 31 December 2019 ……………………………….. $...

Q: A comparative statement of financial positions as at 31 December 2019 and

A comparative statement of financial positions as at 31 December 2019 and 2020 for Flowers Ltd is shown below. Sales for 2020 were $180 000 and profit after tax was $16 350. Cost of sales was $136 45...

Q: Prepare a reconciliation of cash flows from operating activities and profit after

Prepare a reconciliation of cash flows from operating activities and profit after tax for Flowers Ltd from problem 7.40. In problem 7.40

Q: Refer to problems 7.40 and 7.41 and complete

Refer to problems 7.40 and 7.41 and complete an evaluation of the statement of cash flows of Flowers Ltd. In problem 7.40 and 7.41

Q: The balance sheet of Dot Co. for the year ended 31

The balance sheet of Dot Co. for the year ended 31 December 20X2, together with comparative figures for the previous year, is shown in Figure 13.7 (all figures €000). You are informe...

Q: The statement of financial position of C.F. Ltd for

The statement of financial position of C.F. Ltd for the year ended 31 December 20X9, together with comparative figures for the previous year, is shown below. Additional information 1. There were no...

Q: Aragon (a bank) has recently received a request for a

Aragon (a bank) has recently received a request for a term loan from one of its customers, Valencia plc, a company listed on the Alternative Investment Market of the London Stock Exchange. Valencia pl...

Q: You are the manager for the bond portfolio of a pension fund

You are the manager for the bond portfolio of a pension fund. The policies of the fund allow for the use of active strategies in managing the bond portfolio. It appears that the economic cycle is begi...

Q: On January 1, 20X1, Brooks Energy issued $200 million

On January 1, 20X1, Brooks Energy issued $200 million of 15-year, floating-rate debentures atpar value. The debentures pay interest on June 30 and December 31 of each year. The floatinginterest rate i...

Q: On January 1, 20X1, when its $30 par value

On January 1, 20X1, when its $30 par value common stock was selling for $80 per share, Gierach Corporation issued $10 million of 4% convertible debentures due in 10 years. The conversion option allowe...

Q: The Shareholders’ Equity section in the balance sheet of Holiday Roads Company

The Shareholders’ Equity section in the balance sheet of Holiday Roads Company (a fictional company) appears as follows: Net income for 20X1 was $1,700,000, preferred stock dividends...

Q: On January 1, 20X0, Korman, Inc., issued $

On January 1, 20X0, Korman, Inc., issued $1.0 billion of 3% zero coupon subordinated debentures, which were issued at a price of $553.68 per $1,000 principal amount at maturity. Thebonds were priced t...

Q: Avenet Inc., a U.S. company, is a

Avenet Inc., a U.S. company, is a global provider of electronic parts, enterprise computing and storage products, and supply chain and logistics services for the electronic components industry. The co...

Q: You have the following information for Brophy, Inc. /

You have the following information for Brophy, Inc. Required: 1. How much interest expense did the company record during Year 2 on the 7% debentures? How much of the original issue discount was amorti...

Q: The following appeared in the October 15, 2021, issue of

The following appeared in the October 15, 2021, issue of the Financial Smarts Journal: This announcement is not an offer of securities for sale or an offer to buy securities. New Issue: October 15, 20...

Q: The 2018 annual report of Best Buy Co., Inc., reported

The 2018 annual report of Best Buy Co., Inc., reported profitable operations for the most recent six years. However, the company suffered a net loss in 2012. Best Buy reported the following for the tw...

Q: Del Conte Construction Company has experienced generally steady growth since its inception

Del Conte Construction Company has experienced generally steady growth since its inception in 1973. Management is proud of its record of having maintained or increased its earnings per share in each y...

Q: Del Conte Construction Company has experienced generally steady growth since its inception

Del Conte Construction Company has experienced generally steady growth since its inception in 1976. Management is proud of its record of having maintained or increased its earnings per share in each y...

Q: 10. Which of the following will not normally be found under

10. Which of the following will not normally be found under the heading ‘Liabilities due after 1 year’? (a) Deferred taxation (b) Unsecured loan (c) Bank overdraft (d) Provision for reorganization...

Q: 13. Which of the following items is/are likely to

13. Which of the following items is/are likely to be found in a company’s statement of changes in equity? (i) Dividends paid (ii) Surplus on revaluation of non-current (fixed) asse...

Q: 9. Which of the following is the most accurate definition of

9. Which of the following is the most accurate definition of return on shareholders’ equity? (a) Profit after tax as a percentage of share capital (b) Profit after tax as a percent...

Q: Sunoco Oil Company purchased all of its outstanding 8.5 percent

Sunoco Oil Company purchased all of its outstanding 8.5 percent (stated rate) debentures as part of a restructuring plan. The balance sheet value of each outstanding debenture at the time of the repur...

Q: The following information was taken from the footnotes to Target's 2020 financial

The following information was taken from the footnotes to Target's 2020 financial statements (dollars in millions): As of February 1, 2020, the carrying value and maturities of our debt portfolio were...

Q: As the United States slid deeper into a recession, companies with

As the United States slid deeper into a recession, companies with high amounts of cash relative to their debt were coveted by the stock market, while companies with high levels of debt slashed dividen...

Q: Using the resources at your campus or public library or on the

Using the resources at your campus or public library or on the Internet, find the information requested below. a. Select any two convertible debentures (notes or bonds) and determine the conversion ra...

Q: The auditor has completed her work on the financial statements of Leslie

The auditor has completed her work on the financial statements of Leslie Kwok Inc. (LKI) for the year ended 31 December 20X7. The auditor signed her audit opinion on 5 March 20X8; LKI’s board of direc...

Q: The municipality of Duncan has financed a sewage treatment plant by issuing

The municipality of Duncan has financed a sewage treatment plant by issuing $18 million worth of sinking fund debentures. The debentures have a 15-year term and pay a coupon rate of 9% compounded semi...

Q: Which of the following statements concerning the prospectus required by the Securities

Which of the following statements concerning the prospectus required by the Securities Act of 1933 is correct? a. The prospectus is a part of the registration statement. b. The prospectus should enabl...