On May 1,2013,Metro Company Has Bonds with Balances as Shown

question 72

Multiple Choice

On May 1,2013,Metro Company has bonds with balances as shown below. If Metro retires the bonds for $52,000,what will be the effect on the income statement?

• A) There will be a loss on retirement of $3,140.
• B) There will be a gain on retirement of $3,140.
• C) There will be sales revenue of $3,140.
• D) There will be no effect on net income.

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Definitions:

Net Profit

The financial gain remaining after subtracting all operating expenses, interest, taxes, and any other charges from total revenue.

Income Tax Rate

The rate at which an individual or business's income is taxed by the government, similar in essence to Tax Rate but specifically applied to income.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Quantitative Decision Rule

An analytical procedure or guideline used to make decisions based on numerical data and mathematical calculations.