United Supply has a $20 million liability at December 31, 2012, of which $4 million is payable in each of the next five years

United Supply has a $20 million liability at December 31, 2012, of which $4 million is payable in each of the next five years. United Supply reports the liability on the balance sheet as:





A $20 million current liability.



A $16 million current liability and a $4 million long-term liability.



A $4 million current liability and a $16 million long-term liability.



A $20 million long-term liability.



2 )Discount-Mart issues $15 million in bonds on January 1, 2012. They have a eight-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.



Date

Cash Paid

Interest Expense

Increase in Carrying Value

Carrying Value











1/1/12







$13,374,335

6/30/12

$600,000

$668,717

$68,717

13,443,052

12/31/12

600,000

672,153

72,153

13,515,205

6/30/13

600,000

675,760

75,760

13,590,965

12/31/13

600,000







What is the carrying value of the bonds as of December 31, 2013? (Round your answer to the nearest dollar amount.)



$13,515,205.



$13,590,965.



$14,870,513.



$13,670,513.



3.

Discount-Mart issues $19 million in bonds on January 1, 2012. They have a ten-year term and pay interest semiannually. This is the partial bond amortization schedule for the bonds.



Date

Cash Paid

Interest Expense

Increase in Carrying Value

Carrying Value











1/1/12







$16,820,715

6/30/12

$950,000

$1,009,243

$59,243

16,879,958

12/31/12

950,000

1,012,797

62,797

16,942,755

6/30/13

950,000

1,016,565

66,565

17,009,320

12/31/13

950,000









What is the interest expense on the bonds in 2012? (Round your answer to the nearest whole dollar amount.)





$1,009,243.



$1,012,797.



$2,022,040.



$1,900,000.



4.

When a company issues 34,000 shares of $3 par value common stock for $30 per share, the journal entry for this issuance would include:





A debit to additional paid-in capital for $102,000



A credit to common stock for $1,020,000



A credit to additional paid-in capital for $918,000



A debit to cash for $102,000



5.

The ending Retained Earnings balance of Lambert Inc. increased by $2.4 million from the beginning of the year. The company's net income earned during the year is $7.2 million. What is the amount of dividends Lambert Inc. declared and paid?





$2.4 million.



$7.2 million.



$9.6 million.



$4.8 million.


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