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solmaris [256]
3 years ago
10

Punkeytown carries no insurance for possible claims and, as of January 1, 2019 (the start of its fiscal year), Punkeytown had no

outstanding claims. During 2019 a town water main burst, flooding the basements of two property owners. The property owners sued the town for damages. The town settled one claim in December 2019 for $5,000 and expected to pay it in early January 2020. The town’s counsel believes the probable settlement amount on the second claim will be about $11,000, but he expected negotiations to drag on for 18 months before reaching agreement. Based on this information state how much Punkeytown will report as the liability for judgments and claims in its governmental fund balance sheet.
Business
1 answer:
Simora [160]3 years ago
4 0

Answer: Will report a liability of $5000 for judgement debt and a claim of $11,000

Explanation:

The liability refers to the obligations of the firm which are certain is going to make payment as compensation.

The $5000 liability, although payment has not been made it's already Incurred by the company under the acural concept.

The claim of $11,000 is only probable and not certain even though amount and time of execution can be estimated, since it's not certain it will only be recorded as a claim in the goverments fund balance sheet.

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Determine the monthly payment for a 36 month lease on a $26,000 car with a residual of 71% and an interest rate of 7. 5%. A. $10
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The lease fee is equal to the monthly rent, which is formally dictated underneath an agreement between two parties, granting one party the lawful liberty to utilize the other person's real estate belongings and other fixed assets, for a limited period.

The approximate monthly lease payment is $348. 38.

<h3>How to calculate the monthly payment?</h3>

Given,

  • Residual percentage = 71 %
  • Interest rate = 7.5 %
  • Lease amount for the car = $26,000
  • Number of months = 36

First calculate the residual value as:

Residual value = 71 % of the lease amount ($26,000)

\begin{aligned}&= 0.71 \times  26,000\\\\&= \$ 18,460\end{aligned}

Calculate the money factor as:

\begin{aligned}\rm Money\; factor &= \dfrac{7.5 }{2400}\\\\&= 0.003125\end{aligned}

  • <u>Step 1</u>: Calculate the monthly depreciation as:

\begin{aligned}\rm Monthly depreciation &= \dfrac{\text{Lease amount - residual amount }}{\text{Number of months}}\\\\&=\dfrac{ 26000 - 18460}{36}\\\\&= \$209.44\end{aligned}

  • <u>Step 2</u>: Calculate the monthly financial charge as:

\begin{aligned} \text{Monthly Financial Charge} &= (\text{Lease amount + Residual value}) \times  \text{Money factor}\\\\&= (26000 + 18460) \times 0.003125\\\\&= \$138.94 \end{aligned}

  • <u>Step 3</u>: Calculate the lease amount  as:

\begin{aligned}\text{Monthly Lease Amount} &= \text{Monthly Depreciation + Financial Charge}\\\\&= 209.44 + 138.94\\\\&= \$348.38\end{aligned}

Therefore, <u>option d.</u> $348. 38 is correct.

Learn more about the lease amount here:

brainly.com/question/25795577

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