Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1. The bonds pay interest on March 1 and September 1 and mature in 10 years. Assume the independent cases that follow. ·
Case A—The bonds are issued at 100.
Case B—The bonds are issued at 96.
Case C—The bonds are issued at 105.
Southlake uses the straight-line method of amortization.
Chapter 3 Exercise 1 1. Product costs and period costs The costs that follow were extracted from the accounting records of several different manufacturers: 1.
Weekly wages of an equipment maintenance worker
Marketing costs of a soft drink bottler
Cost of sheet metal in a Honda automobile
Cost of president's subscription to Fortune magazine
Monthly operating costs of pollution control equipment used in a steel mill
Weekly wages of a seamstress employed by a jeans maker
Cost of compact discs (CDs) for newly recorded releases of Rush, Billy Joel, and Bryan Adams
Determine which of these costs are product costs and which are period costs.
For the product costs only, determine those that are easily traced to the finished product and those that are not.
Published on May 15, 2014