On July 1, 2017, an Interest Payment Date, $180,000 (Par

question 57

Multiple Choice

On July 1, 2017, an interest payment date, $180,000 (par value) of Lusaka Corp.bonds were converted into 3,600 of their no par common shares.At this time, the unamortized discount on the bonds was $7,200.When the bonds were originally issued, the equity portion of the bond was valued at $1,700.Using the book value method, Lusaka would record

• A)an $174,500 increase in Common Shares.
• B)an $172,800 increase in Common Shares.
• C)an $171,100 increase in Common Shares.
• D)no change to Contributed Surplus.

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Definitions:

Variable Costing

An accounting method that includes only variable production costs (costs that change with the level of output) in the cost of goods sold, highlighting the impact of production volume on profitability.

Variable Costing

An accounting method that includes only variable costs—costs that change with production levels—in the cost of production.

Absorption Costing Reports

A financial document that includes all the manufacturing costs associated with the production of goods, both variable and fixed costs.

Variable Costing

An accounting method that includes only variable production costs in product cost, excluding fixed manufacturing overhead.