9.5 Learning Objective 9-5
1) Maturities of long-term debt due within one year of the balance sheet date are reported separately from long-term debt.
2) Details about a company's liabilities should be included in the notes to the financial statements.
3) The retirement of callable bonds at an amount below face value would appear on a statement of cash flows as an:
A) outflow in the financing activities section.
B) inflow in the financing activities section.
C) outflow in the operating activities section.
D) inflow in the operating activities section.
4) Bonds with a face value of $300,000 are issued at 101. The statement of cash flows would report a cash inflow of:
A) $300,000 in the financing activities section.
B) $303,000 in the financing activities section.
C) $3,000 in the financing activities section.
D) $300,000 in the investing activities section.
5) David Corporation issued $100,000, 5-year bonds at 97 on January 1, 2008. On December 31, 2018 the bonds matured. The payment of the bonds at maturity would be reported on the statement of cash flows as a cash outflow of:
A) $97,000 in the financing activities section.
B) $97,000 in the investing activities section.
C) $100,000 in the financing activities section
D) $100,000 in the investing activities section.
6) After posting the adjusting entries, Bing Corporation has the following account balances (partial listing) at December 31, 2015.
Account
|
General Ledger Balance
|
Accounts Payable
|
$29,000
|
Notes Payable, 5-month, due February 1, 2016
|
58,000
|
Equipment
|
85,000
|
Accumulated Depreciation—Equipment
|
16,000
|
Notes Payable, 7-year, 7%, due February 1, 2022
|
120,000
|
Interest Expense
|
7,000
|
Interest Payable
|
3,000
|
Sales Tax Payable
|
24,000
|
Bonds Payable, due December 31, 2020
|
1,000,000
|
Bonds Payable, due December 31, 2016
|
1,000,000
|
Prepare the current liability section of Bing Corporation's balance sheet at December 31, 2015. Assume that the current portion of the note payable due February 1, 2022 is $15,000.