Question 1

Wyatt Industries is about to issue $ 150,000 bonds with a 10-year term. The interest on these bonds is 3% with annual interest payments. The market rate is currently at 4%.
Instructions
Calculate how much Wyatt will receive from the sale of these bonds.

Accepted Answer

The answer of Wyatt Industries is about to issue $...

Question 2

A subsidiary ledger maintains account details that the general ledger cannot capture.

Accepted Answer

A subsidiary ledger provides detailed information for specific accounts, which are summarized in the general ledger.

Question 3

You recently purchased a new sectional sofa from Steve's Fine Furniture. The price of the deal was $ 4,500 with the option of an extra $ 500 off the list price or no payment for two years. What is the effective interest rate of this deal?

Accepted Answer

The answer of You recently purchased a new sectional sofa...

Question 4

A new lease contract has just been signed for a digital engraving machine. It has been determined that this lease is a capital lease containing the following terms:
Term - 5 years
Payments - $ 5,000 due at the end of each contract year
Discount Rate - 6%
Instructions
Calculate the amount used to capitalize the engraving machine. Round your answer to the nearest dollar.

Accepted Answer

The answer of A new lease contract has just been...

Question 5

You are looking at purchasing a new car. The contract on the offer includes an interest rate of 5% and purchase price of $ 30,000. You can see that the annual blended payments are $ 5,184.60 but you are unable to read the term as there's a mark on the contract.
Instructions
Determine how many years will it take you to pay off this car loan.

Accepted Answer

The answer of You are looking at purchasing a new...

Question 6

The accounts payable subsidiary ledger contains data for individual customers such as balances owing.

Accepted Answer

The accounts payable subsidiary ledger contains data for individual creditors or suppliers, not customers. It tracks amounts the company owes to its suppliers.

Question 7

Simon has $ 8,714.40 in his savings account. Without adding any additional funds to this account Simon would like to have $ 10,000 in it at the end of 4 years. What interest rate would Simon need in order to achieve his goal?

Accepted Answer

The answer of Simon has $ 8,714.40 in his savings...

Question 8

Joe is interested in Marissa's 1974 yellow Corvette. He offers to purchase it from her for $ 25,000. This would include $ 5,000 up front and then moving forward, equal blended payments over the next 6 years at 7%. The payments would be made at the end of each year.
Instructions
How much will the payment be from Joe at the end of each year?

Accepted Answer

The answer of Joe is interested in Marissa's 1974 yellow...

Question 9

Rainbow Bridge Pet Care Centre is looking at issuing $ 200,000 of 5-year bonds in order to finance their small animal wing. The bonds have an interest rate of 5% with semi-annual interest payments. The day they go to issue the bonds, the market rate is at 4%.
Instructions
Determine how much Rainbow Bridge will bring in from the sale of these bonds.

Accepted Answer

The answer of Rainbow Bridge Pet Care Centre is looking...

Question 10

A general ledger is a group of accounts that share a common characteristic such as accounts receivable but have additional details.

Accepted Answer

A general ledger is a complete record of all financial transactions of a company, not just a group of accounts with a common characteristic. It includes all accounts such as assets, liabilities, equity, revenue, and expenses.

Question 11

The market interest rate is 5%. Your company has just announced the following:
Series A Bonds
$ 500,000
6% semi-annual interest
5-year bonds
Instructions
How much can they expect to collect from the series A bond sales?

Accepted Answer

The answer of The market interest rate is 5%. Your...

Question 12

Ting Towables has a programmable plastic moulding machine. This machine is expected to last another 4 years. The most recent estimates for its future cash flows have been calculated at: $$\begin{array}{l}
\quad\quad\quad\quad\text { Estimated }\
\begin{array} { l l } 
\text { Year } & \text { Cash Flows } \
1 & \$ 5,000 \
2 & \$ 5,500 \
3 & \$ 4,000 \
4 & \$ 3,500
\end{array}
\end{array}$$ Instructions
Calculate the moulding machine's value in use using a discount rate of 4%.

Accepted Answer

The answer of Ting Towables has a programmable plastic moulding...

Question 13

Each general ledger control account does not have to equal the total balance of the individual accounts in the related subsidiary ledger.

Accepted Answer

The total balance of a general ledger control account must equal the sum of the balances of the individual accounts in the related subsidiary ledger to ensure accurate financial records.

Question 14

Fung-Yee dreams of owning her own home 10 years from now. At that time, she would like to have $ 30,000 saved up for a down payment. Interest rates are expected to remain at 4%.
Instructions
Calculate how much Fung-Yee would have to invest today to realize her dream. Round your answer to the nearest dollar.

Accepted Answer

The answer of Fung-Yee dreams of owning her own home...

Question 15

Stillwater Limited's managing partner has just purchased an investment that pays an annual amount of $ 5,000 at the end of each year for the next 10 years. This investment has a guaranteed return of 4%.
Instructions
Calculate how much Stillwater likely paid for this investment.

Accepted Answer

The answer of Stillwater Limited's managing partner has just purchased...

Question 16

Each general ledger control account must equal the total balance of the individual accounts in the related subsidiary ledger.

Accepted Answer

The general ledger control account is a summary account that reflects the total balance of all individual accounts in the subsidiary ledger, ensuring accuracy and consistency in financial records.

Question 17

Suki Services has just leased a new printer that the chief accountant has determined is a capital lease. The terms are as follows:
Term - 5 years
Payments - $ 7,000 due at the end of each contract year
Discount Rate - 4%
Instructions
What is the present value of the rental payments rounded to the nearest dollar?

Accepted Answer

The answer of Suki Services has just leased a new...

Question 18

Common subsidiary ledgers include accounts payable, accounts receivable, and inventory.

Accepted Answer

Subsidiary ledgers are detailed records that support general ledger accounts, and accounts payable, accounts receivable, and inventory are common examples of such ledgers.

Question 19

Key West Surfboards is issuing $ 260,000 worth of their bonds today. The bonds have a 5-year term and
an interest rate of 4% equal to that of the market.
Instructions
Calculate the sales price of these bonds.

Accepted Answer

The answer of Key West Surfboards is issuing $ 260,000...

Question 20

Cost of goods sold is typically calculated at the end of the period under a periodic inventory system.

Accepted Answer

The answer of Cost of goods sold is typically calculated...

Quiz 11: Understanding Interest, Annuities, and Bond Valuation

Wyatt Industries is about to issue $ 150,000 bonds with a 10-year term. The interest on these bonds is 3% with annual interest payments. The market rate is currently at 4%. Instructions Calculate how much Wyatt will receive from the sale of these bonds.