The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n) deduction from net income. investing activity. addition to net income. financing activity.

The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n) deduction from net income. investing activity. addition to net income. financing activity.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter10: Long-term Liabilities

Section: Chapter Questions

Problem 10.10E

See similar textbooks

Related questions

Q: The directors of Transport Ltd produced the following Statement of profit or loss account for 2017 a...

A: GIVEN Statement of Profit or Loss Account for the year ended 31st December 2017 Revenue 320,...

Q: Exercise 14-7A (Algo) Preparing an inventory purchases budget LO 14-3 Perez Company selts lamps and ...

A: a)Calculation of inventory purchase budget as follows under:- Ending inventory for march $85,000 x 1...

Q: Noel Stewart has estimated that the total fixed costs for his department are £10,000.He also estimat...

A: The various costs incurred in the production are categorised as fixed and variable costs. The cost p...

Q: Africa Traders bought furniture that will be used in the office of Africa Traders for R20 000 using ...

A: Lets understand the basics. Current asset is a asset a cash or asset which can be convertible into c...

Q: PROBLEM 2: (CHANGE IN ACCOUNTING POLICY) Shilo Co. has been using the weighted average method of inv...

A: Accounting policy: Accounting policy includes those accounting methods, rules, concepts, and princip...

Q: ABC Company sells to XYZ, 5 used factory equipment, each of which was acquired at P20,000, 3 years a...

A: Loss from sale of equipment is the difference between the receipt from sales and cost less accumulat...

Q: Instruction: Prepare a classified statement of financial position for Melon Company Melon Company St...

A: Statement of Financial Position The purpose of preparing statement of financial position which knows...

Q: AB Company produces two Products: A and B. Product A has a contribution margin of $30 per unit. Prod...

A: Desired level of contribution = Fixed cost + Target operating income ...

Q: PR 16-18 Statement of cash flows-indirect method OBJ. 2 The comparative balance sheet of Merrick Equ...

A: Cash Flow Statement: A cash flow statement is a financial statement that summarises all of the cash ...

Q: 2. A gift store reported the following records for its operation during the month of February. @Cost...

A: Closing Inventory is the stock at the end of the closing period held by the entity. Markup percent i...

Q: Oak View Chemicals produces two main products, M-10 and M-20, and one by-product, B-60, from a singl...

A: GIVEN If Processed Further Product Units Produced Unit Sales Value at Split-off Add...

Q: International Co. is a firm that is experiencing rapid growth. Lately, the firm paid a dividend of P...

A: Last dividend = P5.90 Growth rate for first 3 years = 19% Growth rate after 3 years = 7% Required r...

Q: o. Reconcile the variable costing income from operations of $357,500 with the absorption costing inc...

A: The question is based on the concept of Cost Accounting.

Q: The following costs pertain to Bulacan Corporation’s only product Leather: Direct Materials P 10.00/...

Q: On June 30, a company paid $3,000 for insurance premiums for the current year and debited the amount...

A: In this question, we have to decide the statement is true or false.

Q: sets and obligations Plan assets (at fair value) $600,000 Accumulated benefit obligation 1,110,000 P...

A: Pension expense refers to the amount which the business charges to the expense in relation to the li...

Q: The December 31, 2019 statement of financial position of Help Company included the following informa...

A: Solution Notes receivable is the account on balance sheet usually under the current asset section if...

Q: On July 31, the end of the first month of operations, Rhys Company prepared the following income sta...

A: The variable costing income statement is prepared with assumption of fixed manufacturing costs as pe...

Q: A credit card offers an introductory rate of 7% compounded monthly for the first six months, increas...

A: A credit card is a short-term credit facility provided by the banks to its customers. Interest is ch...

Q: The following costs pertain to Bulacan Corporation’s only product Leather: Direct Materials P 10.00/...

Q: PROBLEM NO. 1 The December 31, 2019 statement of financial position of Help Company included the fo...

A: Solution Accounts receivable is the balance of money Due to a firm for gooda or services Delivered o...

Q: Help me answer the letter d and e *with solution thank you

A: Degree of Financial leverage = EBIT/EBT Degree of combined Leverage = Operating Leverage x Financial...

Q: Steak Town Company leased equipment for its nine-year useful life, agreeing to pay P500,000 at the s...

A: For the determination of lease liability and interest expense for the year December 31, 2022, We hav...

Q: a. If Canace Company, with a break-even point at $661,200 of sales, has actual sales of $870,000, wh...

A: The question is based on the concept of Cost Accounting. Break even point is the point at which ther...

Q: Accounting PART B Glico Wings uses FIFO actual costing system. The value of fixed manufacturing cost...

A: The two main techniques for ascertainment of cost and determination of income are absorption costing...

Q: An engineer bought a car worth Php 662192. He paid a immediate downpayment of Php 15165 a remaining ...

A: Formula: PMT = PV x i(1+I)^n/(1+I)^n - 1 Where, PV = Loan amount = 662192 - 15165= 647027 i= interes...

Q: 3.a. AG Pharma has taken deposits from the public under the name Public Deposit, for a duration of 5...

A: Public deposits means the unsecured amount of money invited through companies from public mainly for...

Q: 1 The company's bank statement shows a cash balance of $12,000. Comparing the company's cash records...

A: Pretax income is the excess of sales over cost of goods sold and all operating and non-operating exp...

Q: PR 17-18 Horizontal analysis of income statement For 2014, Macklin Inc. reported its most significan...

A: Net income is the excess of net sales over total expenses .

Q: Jude is arranging for a party to be held in the students' union. The use of the hall will be free bu...

Q: APPLE Company leased a manufacturing machine from 123 Company on 1/1/2020 for 10 years. The lease te...

A: A. The lease type is a Finance lease as the useful life if the asset is equal to the lease term. Hen...

Q: E9-4B: (Statement of Financial Position – Missing Elements) The following calendar year-end account ...

A: Introduction:- A current asset is any asset that may be expected to be sold, consumed, or expended d...

Q: On June 1, 2019, YODA CORP. acquired a 5-year, 10%, P1,00 value bonds at 92. The company paid broker...

A: Interest revenue refers to the earnings which the entity makes from the investments or on the debts ...

Q: Rahim and Karim undertook jointly to build a house for a company at an agreed price of Tk. 60,000, p...

A: Joint venture Account : On the debit side of this account all expenses (paid personally by the co - ...

Q: A commercial vehicle is purchased for an acquisition cost of $300,000. The operating and maintenance...

A: EAC = NPV*r/1-(1+r)-n

Q: On January 1, 200A, ABC Company sells to XYZ, a used transportation equipment, which was acquired at...

A: Face value of note = P450,000 Interest amount = P450,000 x 11% = P49,500 Market rate of interest = 1...

Q: Prepare journal entries. 1 Record the issue of common shares to promoters. 2 Record the issue of ...

A: Journal Entries of Trio Networks Corporation’s for 2020

Q: sume you are a manager of a fa a fixed and variable cost at you anges in costs can impact profit

A: Variable costs refer to the expenses that change with the change in the level of production of an it...

Q: 2 At December 31, the company had account balances in Accounts Receivable of $50,000 and in Allowanc...

A: "Since you have asked multiple questions, we will solve first question for you. If you want any spec...

Q: Last period Hartig Corporation sold 40,000 units, total sales were $303.000, total variable expenses...

A: Formula: Contribution margin ratio = Contribution margin / Sales value

Q: A firm that sells a single product had a beginning inventory of 10,000 units with a total cost of BD...

A: FIFO means the first in first out which means that goods purchased first will be sold first. Weight...

Q: Krueger Corporation manufactures a single product whose selling price is $134 per unit and whose var...

A: Working notes: Selling price per unit = $134 Variable expenses per unit = $67 Contribution per un...

Q: 1 The company's bank statement shows a cash balance of $12,000. Comparing the company's cash records...

A: Hi! Thank you for the question As per the honor code, We’ll answer the first question since the exac...

Q: The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to ...

A: 1)

Q: Under a Contract of Sale, Ana bound herself to deliver a diamond ring to Ben for P50,000 to be used ...

A: Prestation is the object of the contract. It may 1.be an obligation to give, to do or not to do. ...

Q: A partnership employed an inexperienced bookkeeper. He has prepared the current account of one of th...

A: Solution Note = The brought forward balance = 2700 not 2070 (This correction is made on the basis of...

Q: Noel Stewart has estimated that the total fixed costs for his department are £10,000.He also estimat...

A: Fixed costs: Fixed costs means a cost that is not dependent on the level of production of goods or s...

Q: ange in net inter percentage poi

A: Given as, Initial GAP= $100 million, Percentage= 1%.

Q: ales Calculate contribution margin, break even point (€) and safety margin (€)

A: Solution Formula used Contribution margin = sales – variable cost Contribution margin ratio...

Q: A, B and C are solidary debtors of W and Y, solidary creditors for P 12,000 where the share of the d...

A: Solution Minor person Means a person who is under the "Age of majority" - The age at which a person...

Question

15.

The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n)

deduction from net income.

investing activity.

addition to net income.

financing activity.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Interest revenue for debt investments at fair value through other comprehensive income is computed based on the instruments’ a. face value using the effective interest rate. b. face value using the nominal interest rate. c. carrying amount using the effective interest rate. d. carrying amount using the nominal interest rate.
what of the following is the correct calculation for interest cover : a- total debt / interest payable b- interest payable / total debt c- operating profit / interest payable d- interest payable / operating profit
The application of the present value factors in the computation of carrying amounts of bonds payable is a representation of what accounting principle? Conservatism Matching Principle Time Value of Money Materiality
Debt issuance costs are: Accounted for as a deduction from the equity balance on the balance sheet Recognized initially as a current liability on the balance sheet Amortized over the term of the related debt liability Expensed on the income statement when the transaction occurs Which one is the correct answer please?
What is the effective interest rate of a bond or other debt instrument measured at amortized cost? Select the correct response: The interest rate currently charged by the entity or by others for similar debt instruments (i.e., similar remaining maturity, cash flow pattern, currency, credit risk, collateral, and interest basis). The interest rate that exactly discounts estimated future cash payments or receipts through the expected life of the debt instrument or, when appropriate, a shorter period to the net carrying amount of the instrument. The basic, risk-free interest rate that is derived from observable government bond prices The stated coupon rate of the debt instrument.
Describe the key characteristics of a debt investment and demonstrate how to account for a purchase and for interest revenue.
Fair value is used to value which of the following balance sheet accounts? a. Prepaid expenses; patents; property, plant, and equipment b. Capital lease obligations, bonds payable c. Receivables net of allowance for doubtful accounts d. Debtsecurities available for sale, trading securities
Choose the correct. The cost of debt capital is calculated on the basis of: A. Net proceeds B. Annual Interest C. Capital D. Arumal Depreciation
Describe Debt Investments to Be Held to Maturity.
1. According to PFRS 9, The amortized cost of a financial instrument is calculated using. A. The effective interest method. B. The straight line method C. A or b D. Choice a however, the straight line method can be used in some circumstances. 2. The amortization of a discount on an investment in bonds measured at amortized cost A. Increases the carrying amount of the investment B. Is the excess of interest income over interest received or receivable. C. Is recorded directly to the invesment account D. All of these 3. Which of the following statements is correct for an investment in term bonds that was acquired at a premium? A. The amortized cost of the bonds increases annually. B. The current and non current portions of the bonds as of the reporting date are reported separately. C. The interest income recognized each year is higher than the amount of interest received/ receivable. D. The effective interest rate is lower than the stated rate of the bonds. 4. The rate…
Identify the major categories of long-term debt financing
Define each of the following terms:c. Off–balance sheet financing; capitalizing