ACCT 504 help A Guide to career/uophelp.com ACCT 504 help A Guide to career/uophelp.com | Page 26

Q-4 Set 2
Question 3.3. (TCO H) Simpson Inc. purchased 5, $4,000, 11% bonds of
Hillsdale Corporation when the market rate of interest was 10%. Interest
is paid semiannually on the bonds, and the bonds mature in 4 years.
Instructions:
Compute the total price paid by Simpson Inc. for the bonds showing
your calculation for the present value of the principal and the present
value of the interest payments.
Present value tables (Exhibit 8-14 and Exhibit 8-15) are available on
pages 452 and 453 of your Harrison, Horngren, and Thomas
textbook. NOTE: Be sure you review the PV Tables completely to
ensure you find the correct period and interest rate for the calculation.
(Points : 20)
Question 5. (TCO C) This is a 2-part question.
Part 1) Indicate which section of the statement of cash flows should
contain each of the following items, and whether each item would result
in an inflow or outflow of cash. The sections are Operating, Investing,
and Financing. (30 points)
Part 2) Please explain how to calculate free cash flow and the
importance of free cash flow to investors. (6 points) (Points : 36)
Q-5 Set 2
5. The Alpha Company gathered the following condensed data for the
year ended December 31, 2014:
Instructions:
(1) Prepare a multiple-step income statement for the year ended
December 31, 2014.