A Company Reported That Its Bonds with a Par Value

question 172

Multiple Choice

A company reported that its bonds with a par value of $50,000 and a carrying value of $57,000 are retired for $60,000 cash, resulting in a loss of $3,000. The amount to be reported under cash flows from financing activities is:

• A) $(7,000).
• B) $7,000.
• C) $(57,000).
• D) $(60,000).
• E) $(3,000).

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Definitions:

Labour Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost.

Flexible Budget

A budget that adjusts or flexes with changes in the volume or activity level of a business.

Overhead Volume Variance

The difference between the budgeted and actual overhead costs, attributable to variations in production volume.