Presented Here Is a Partial Amortization Schedule for Roseland Company

question 306

Multiple Choice

Presented here is a partial amortization schedule for Roseland Company who sold $300,000, five year 10% bonds on January 1, 2017 for $312,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (ii) ?

• A) $32,400
• B) $27,600
• C) $31,200
• D) $28,800

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Definitions:

Merchandise Inventory

Goods a company holds for the purpose of resale in the normal course of business.

Product Costs

These are costs that are directly associated with the creation of a product, including direct materials, direct labor, and manufacturing overhead.

Period Costs

Expenses incurred by a business that are not directly tied to the production process and are charged to the period in which they occur.

Variable Cost

Expenditures that are directly correlated with the volume of production or output level.