Mgmt 210 Hw 9

Nicholas Bishop

HW 9

I. Brief Exercise 10-1 Classification of Long-Term Liabilities, p. 505

Only Bonds Payable would be included in the Long-Term Liability category of the balance sheet.

II. Brief Exercise 10-2 Bond Features, p. 505

Debenture Bonds are bonds that are not backed by specific collateral from the issuer.

Secured Bonds are bonds that indicate specific assets that serve as collateral in the case of a default.

Convertible Bonds are bonds that can be converted to common stock at a future time.

Callable Bonds are bonds that can be retired by the issuer before the specified due date.

Face value of the bonds is the principle amount of the bond as stated on the bond certificate.

Face rate of interest is the rate of interest on the bond certificate. It is the rate of interest that will be paid each interest period.

Issue Price is the present value of the annuity of interest payments (at the market rate of interest) plus the present value of the principle.

III. Exercise 10-10 Impact of Transactions Involving Bonds on Statement of Cash Flows, p. 509

1. F

2. O

3. F

IV. Exercise 11-2 Solve for Unknowns, p. 558

1. Common Stock $100,000

Additional Paid in Capital 250,000

Total contributed capital $350,000

Retained earnings 100,000

Treasury Stock 10,000

Total Stockholders’ equity $440,000.

2. 10,000 – 9,200 = 800 shares.

$10,000 / 800 = $12.50 per share

V. Exercise 11-14 Reporting Changes in Stockholders' Equity Items, p. 562

Ryde, Inc.

Statement of Sockholders’ Equity

For the year ended April 30, 2014

Common Add’l Paid Retained Total Stockholders’

Stock In Capital Earnings Equity

Balance 5/1/13 $345,000 $1,298,000 $3,013,000 $4,656,000

Net Income $ 556,000

Dividends $ (78,000)

Balance 4/30/14 $345,000 $1,298,000 $3,491,000 $5,134,000

VI. Exercise 11-18 Impact of Transactions Involving Treasury Stock on Statement of Cash Flows, p. 563...