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Act360 Mastery

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Submitted By natesmom0721
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* Question 1
0 out of 1 points | On January 1, Martinez Inc. issued $4,000,000, 11% bonds for $4,260,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Martinez uses the effective-interest method of amortizing bond premium. At the end of the first year, Martinez should report unamortized bond premium of _____.Answer | | | | | Selected Answer: | $246,840 | Response Feedback: | ($4,000,000 × .11) – ($4,260,000 × .10) = $14,000 ($4,260,000 – $4,000,000) – $14,000 = $246,000. | | | | | * Question 2
0 out of 1 points | Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2012: Common stock, $20 par value; authorized 75,000 shares; | | | Outstanding 45,000 shares | $900,000 | Paid-in capital in excess of par | 250,000 | Retained earnings | 300,000 | | | $1,450,000 |
During 2013, the following transactions occurred relating to stockholders' equity:3,000 shares were reacquired at $28 per share.
3,000 shares were reacquired at $35 per share.
1,800 shares of treasury stock were sold at $30 per share.
For the year ended December 31, 2013, Oaks reported net income of $450,000. Assuming Oaks accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2013, balance sheet?Answer | | | | | Selected Answer: | $1,315,000 | Response Feedback: | $1,450,000 – (3,000 × $28) – (3,000 × $35) + (1,800 × $30) + $450,000 = $1,765,000 | | | | | * Question 3
1 out of 1 points | Glavine Company issues 6,000 shares of its $5 par value common stock having a fair value of $25 per share and 9,000 shares of its $15 par value preferred stock having a fair value of $20 per share for a lump sum of $312,000. The proceeds allocated

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