Consider the following activities that take place in a veterinary clinic. (a) Cleaning cages.
(b) Heating and air conditioning the clinic.
(c) Sending blood work to a lab.
(d) Dispensing medicine.
Which of the following statements is true?
A. Heating and air conditioning the clinic is a facility level activity.
B. Dispensing medicine is a facility level activity.
C. Cleaning cages is a facility level activity.
D. Sending blood work to a lab is a facility level activity.
E. Service entities cannot use ABC for overhead allocation.

Mae jong corp. issues $1,000,000 of 10% bonds payable which may be converted into 10,000 shares of $2 par value ordinary shares. the market rate of interest on similar bonds is 12%. interest is payable annually on december 31, and the bonds were issued for total proceeds of $1,000,000. in accounting for these bonds, mae jong corp. will: (a) first assign a value to the equity component, then determine the liability component. (b) assign no value to the equity component since the conversion privilege is not separable from the bond.(c) first assign a value to the liability component based on the face amount of the bond.(d) use the “with-and-without” method to value the compound instrument.

Pear co.’s income statement for the year ended december 31, as prepared by pear’s controller, reported income before taxes of $125,000. the auditor questioned the following amounts that had been included in income before taxes: equity in earnings of cinn co. $ 40,000 dividends received from cinn 8,000 adjustments to profits of prior years for arithmetical errors in depreciation (35,000) pear owns 40% of cinn’s common stock, and no acquisition differentials are relevant. pear’s december 31 income statement should report income before taxes of

Abank has $132,000 in excess reserves and the required reserve ratio is 11 percent. this means the bank could have in checkable deposit liabilities and in (total) reserves.