interest, were sold for $106,000 on September 30, when the market rate of interest was 7%. The issuer uses straight-line amortization of premium. The December 31, year-end adjusting entry for accrued interest will include a a)debit to Interest Payable for $2, 000 b)credit to Interest Payable for $1, 850 c)debit to Premium on Bonds Payable for $150 d)debit to Bond Interest Expense of $1, 850 9. Mishita Heavy Machine Company purchased a tractor by issuing a 5-year non-interest-bearing note for $100,000 when the market rate of interest was 10%.the note's fair value when issued using a 10%rate is $62, 090. When the note was issued, the tractor was recorded at a value of a)S100000 b)S62,090 c)s90,000 d)s37,910 10. Here is information taken from the accounting books of Nikey Company: net sales were $360,000, the cost of goods sold was $180,000, operating expenses were $120,000 the ending balance of the Accounts Receivable account was $20,000. Now assume that the merchandise turnover ratio was 12.75. then nikey, s profit margin was: a)16.67% b)20.0% c)40.0% d)333% Part IV: Exercises Problems(2*20=40 points) 1. Here is some information adopted from the accounting books of the Bailey Brothers Net sales were $360.000 The cost of goods sold was $180,000 Operating expenses were $120,000 The ending balance of the Accounts Receivable account was $20, 000 Assume that the merchandise turnover ratio was 12.75 Requirement Calculate the profit margin of the Bailey& Brothers Co 2. The Shakespeares Mining Company acquired an iron ore deposit for $2,000,000. The company's geologist estimated the deposit to contain 1, 500,000 tons of iron ore Extracting equipment with a 10-year service life and costing $450,000 was installed in the mine. At the end of the first year, 60,000 tons had been extracted Requirement:interest, were sold for $106,000 on September 30, when the market rate of interest was 7%. The issuer uses straight-line amortization of premium. The December 31, year-end adjusting entry for accrued interest will include a: a) debit to Interest Payable for $2,000 b) credit to Interest Payable for $1,850 c) debit to Premium on Bonds Payable for $150 d) debit to Bond Interest Expense of $1,850 9. Mishita Heavy Machine Company purchased a tractor by issuing a 5-year non-interest-bearing note for $100,000 when the market rate of interest was 10%. The note's fair value when issued using a 10% rate is $62,090. When the note was issued, the tractor was recorded at a value of: a) $100,000 b) $62,090 c) $90,000 d) $37,910 10. Here is information taken from the accounting books of Nikey Company: net sales were $360,000, the cost of goods sold was $180,000, operating expenses were $120,000, the ending balance of the Accounts Receivable account was $20,000. Now assume that the merchandise turnover ratio was 12.75. Then Nikey’s profit margin was: a) 16.67% b) 20.0% c) 40.0% d) 33.3% Part IV: Exercises & Problems (2*20 = 40 points) 1. Here is some information adopted from the accounting books of the Bailey & Brothers Co.: Net sales were $360,000. The cost of goods sold was $180,000. Operating expenses were $120,000. The ending balance of the Accounts Receivable account was $20,000. Assume that the merchandise turnover ratio was 12.75. Requirement: Calculate the profit margin of the Bailey & Brothers Co. 2. The Shakespeares Mining Company acquired an iron ore deposit for $2,000,000. The company's geologist estimated the deposit to contain 1,500,000 tons of iron ore. Extracting equipment with a 10-year service life and costing $450,000 was installed in the mine. At the end of the first year, 60,000 tons had been extracted. Requirement: