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Chapter 21, Leases

 Bonds are issued on June 1, 2020 that have interest payment dates of April 1 and October 1. Consider the financial statements for the year ended December 31, 2020.  Bond interest expense and interest payable on the financial statements for the year ended December 31, 2020, is for a period of:          Interest expense            Interest payableA.        Seven months.             Three monthsB.        Seven months.             Seven monthsC.        Three months.             Seven monthsD.        Three months.             Three months

Hope Company bought 30% of Faith Corporation in 2020, and uses the equity method to account for the investment.  Suppose that on the receipt of dividends, Faith made the entry:             Cash                                           $100,000                            Investment in Faith Corp.      $100,000 I think that it is the correct entry to make when an equity method investor receives dividends. What is the effect on Assets and Shareholder’s equity of this journal entry?             Assets                                    Shareholders’ equityA.        increase $100,000         increase $100,000B.        increase $100,000         decrease $100,000C.        decrease $100,000       decrease $100,000D.        no change                            no change

The following information pertains to Seda Co.’s pension plan: What was Seda’s projected benefit obligation at December 31, if no change in actuarial estimates or amendments occurred during the year?

ABC declared and paid cash dividends in January of the current year.  ABC paid $5 million to preferred shareholders and $3 million to common shareholders. What effect will the dividends have on the numerator of the basic EPS? 

Which of the following is not a condition in the determination of when a valid contract exists:

Oklahoma Oil Corp. paid interest of $785,000 during 2018, and the discount on bonds payable fell by $100,000.  What was interest expense for the year? 

Actuary and trustee reports indicate the following changes in the PBO and plan assets of Douglas-Roberts Industries during 2020: Prior service cost at Jan 1, 2020, from plan amendment at the                        beginning of 2017 (amortization: $2 million per year) $14 million Net loss-AOCI at Jan. 1, 2020 (previous losses exceeded previous gains) $82 million Average remaining service life of the active employee group 10 years Actuary’s discount rate 7% $ in millions for the following lists. Determine Douglas-Roberts’ pension expense for 2020.

A stock dividend or stock split would affect which of the following shares in computing EPS?

Pfeffer Company reports net income of $360 million for 2020; the company’s tax rate is 40%.  At the beginning of the year, 200 million common shares were outstanding.  On August 1, 2020 the company issued an additional 120 million shares. What will Pfeffer’s basic EPS be?