ACCT 550 Week 4 Homework Assignment
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Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods.
(a) $30,000 receivable at the end of each period for 8 periods compounded at 12%.
(b) $30,000 payments to be made at the end of each period for 16 periods at 9%.
(c) $30,000 payable at the end of the seventh, eighth, ninth, and tenth periods at 12%.
E6-12 (Analysis of Alternatives)
The Black Knights Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its
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(b) Prepare the journal entry under basis 2, assuming that Chester Company did not remit payment until July 29
E7-7 (Recording Bad Debts)
Duncan Company reports the following financial information before adjustments.
Instructions
D C
Accounts Receivable $100,000
Allowance for Doubtful Accounts $2,000
Sales Revenue (all on credit) 900,000
Sales Returns and Allowances 50,000
Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estimates bad debts at (a) 1% of net sales and (b) 5% of accounts receivable.
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The company has an agreement with a bank that allows the company to borrow the exact amount needed at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company will pay the bank all of the accrued interest on the loan and as much of the loan as possible while still retaining at least $50,000 in cash.
1. For the year-end December 31, 2007, financial statements, what amount should M record as a liability?
a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest?
9. What is the present value of an 8-year annuity that makes quarterly payments of $73 if
In Question 6, the payment occurs at the beginning of each period rather than at the end, this type of annuity is named as annuity due.
To find the table value, we will use the table in the book and look for 5% Annual interest and 15 years. Which is 15.82.
c) The present value of $500 to be received in one year when the opportunity cost rate is 8 percent (discounting):
a. I = 4%, PV = $74,000, N = 20, FV = $162,143 b. FV = $2 million, N = 25, I = 8%, PMT = $27,357 c. PMT = $160,000, N = 20, I = 4%, PV = $2,174,452 d. FV = $3.5 million, N = 30, I = 7%, PMT = $37,052
Week 8 DQ 4Is the compound interest formula—such as would be used to calculate a car loan—an
a. How much would the payment be if rate of interest is 5% and you only financed the truck for 48 months?
1. Based on the 10 percent compensating balance requirement, how much would Pierce Control Systems have to borrow to acquire $10 million in needed funds?
iii) In one year when deposit matures fulfill the forward contract obligation by converting A$764,285.71 to
(b) total interest expended by those individuals exceeds the allowable amount for that year. Each individual is allowed an amount of relief for each year based on the following formula: