accounting exam 3

Keystone Corporation's balance sheet showed the following liability and stockholders' equity amounts: Current Liabilities, $100,000; Bonds Payable, $150,000; Capital Lease Obligations, $20,000; Deferred Income Tax Liability, $5,000; and total stockholders' equity, $500,000. The debt-to-equity ratio is

0.55

A company purchases a coal mine for $1,000,000. It estimates that the mine contains 5,000,000 tons of coal and has a five-year life with no salvage value. If the company extracts and sells 800,000 tons during the first year, how much accumulated depletion should be recorded?

160,000

Focal Point Engineering purchased a trademark at the beginning of 2017 for $200,000. Although the trademark's legal life is 20 years, economic benefits were expected for only 10 years. Also, during 2017, the company incurred research and development costs of $200,000. The book value of the trademarks at December 31, 2017, is

180,000

On January 1, 2017, $1,000,000, 10-year, 10% bonds, were issued at 97. Interest is paid annually on January 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the monthly amortization amount is

250

On January 1, a company vehicle with a useful life of eight years and a residual value of $1,000 was purchased for $25,000. What is the depreciation expense in year 3 under straight-line depreciation?

3000

On January 1, a company vehicle with a useful life of eight years and a residual value of $1,000 was purchased for $25,000. What is the depreciation expense in year 1 using the double-declining-balance method?

6,250

A company issues $200,000 of 20-year, 6 percent bonds at 95. If interest is paid semiannually, what is the amount of bond interest expense recorded (assuming straight-line amortization) on any interest date?

6250

A graphics design company issued bonds in the amount of $1,000,000 with a stated interest rate of 8%. If the interest is paid semiannually and the bonds are due in 10 years, what would be the total amount of interest paid over the life of the bonds?

800000

Elway Company purchases land for $85,000 cash. Elway assumes $2,500 in property taxes due on the land. The title and attorney fees totaled $1,000. Elway has the land graded for $2,200. They paid $10,000 for paving of a parking lot. What amount does Elway record as the cost for the land?

90700

Which of the following statements is not true about goodwill?

It should be expensed in the year acquired

When the yield/market rate of interest is greater than the contractual/stated rate of interest

bonds will be issued at a discount

The exclusive right to reproduce and sell a literary, artistic, or musical work is called a

copyright

an unsecured bond is a

debenture bond

A corporation issues bonds that pay interest each April 1 and October 1. The corporation's December 31 adjusting entry could include a

debit to Unamortized Bond Premium

The cost of tearing down a building situated on land just purchased should be

debit to land account

An asset that costs $7,000 and has accumulated depreciation of $5,200 is sold for $1,000. The ensuing journal entry would include a

debit to loss of sale of asset, 800

Which of the following is not a capital expenditure?

painting the office walls