accounting test 3

Kier Company issued $200,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 4-year term to maturity. The bonds have a 6.5% stated rate of interest and interest is payable in cash on December 31 each year. Based on this information alone, what are the amounts of interest expense and cash flows from operating activities, respectively, that will be reported in the financial statements for the year ending December 31, Year 1?

$13,000 and $13,000 (200,000/0.065)

How is a company's operating cycle determined?

Adding the average days in inventory to the average days in receivables.

Which of the following entities would report income tax expense on its income statement?

Corporation

Which of the following intangible assets does not convey a specific legal right or privilege?

Goodwill

Which of the following statements is correct regarding accounting treatment of goodwill?

Goodwill is recorded as an asset and is not written off as an expense unless its value decreases.