Jamona Corporation Scenarioa

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Jamona Corporation

On January 1, 2006, Jamona Corp. purchased 12% bonds, having a maturity value of $300,000, for $322,744.44. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2006, and mature January 1, 2011, with interest receivable December 31 of each year. The company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale. The fair value of the bonds at December 31 of each year is as follows:

o 2006 – $320,500

o 2007 – $309,000

o 2008 – $308,000

o 2009 – $310,000

o 2010 – $300,000

The following information is available from Jamona’s inventory records:

| |Units |Unit Cost |
|January 1, 2007 (beginning inventory) |600 |$ 8.00 |
|Purchases: | | |
|January 5, 2007 |1,200 |9.00 |
|January 25, 2007 |1,300 |10.00 |
|February 16, 2007 |800 |11.00 |
|March 26, 2007 |600 |12.00 |

A physical inventory on March 31, 2007, shows 1,600 units on hand. Select any one of the inventory methods (LIFO, FIFO, Average Cost, or others).

o On July 6, Jamona Corp. acquired the plant assets of Berry Company, which had…...

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