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Oksana_A [137]
3 years ago
11

Natalie and Curtis have been experiencing great demand for their cookies and muffins. As a result, they are now thinking about b

uying a commercial oven. They know which oven they want and that it will cost $17,000. The company already has $5,000 set aside for the purchase and will need to borrow the rest.
Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $12,000 on November 1, 2017, for a period of 3 years at a 5% interest rate. The terms provide for fixed principal payments of $2,000, on May 1 and November 1 of each year plus 6 months of interest. Determine the current portion of the note payable and the long-term portion of the note payable at October 31, 2018.
Business
1 answer:
lukranit [14]3 years ago
5 0

Answer:

Cookie & Coffee Creations Inc.

a) Current Portion of Note Payable:

= $4,000

b) Long-term Portion of Note Payable:

= $6,000

Explanation:

Data and Calculations:

Date of Note Payable = November 1, 2017

Period = 3 years

Interest rate = 5%

Terms of payment:

Fixed principal payments = $2,000

Payment dates = May 1 and November 1

Each year's principal repayment = $4,000 ($2,000 x 2)

From November 1, 2017 to October 31, 2018 = $4,000

At October 31, 2018, Payment made = $2,000 on May 1

Remaining Note payable = $10,000 ($12,000 - $2,000)

Current Portion = $4,000 ($2,000 x 2)

Long-term Portion = $6,000

b) The current portion of $4,000 will be payable on November 1, 2018 and May 1, 2019.  The current portion represents the short-term portion of the note payable, which is the portion that will be settled within a 12-months' period.  Since Cookie & Coffee Creations Inc. had already paid $2,000 on May 1, 2018, the long-term portion will only remain $6,000 ($12,000 - $2,000 - $4,000), which is the difference between the total note payable, the portion paid on May 1, 2018, and the current portion of $4,000 that will be payable within one year.

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6 0
3 years ago
Eckelberger Products Inc. makes high-speed recorders with high-speed scanning. The small company has been growing at an average
laila [671]

Answer:

The effective growth rate daily is 0.1455%

Explanation:

The effective growth rate daily can be computed using the below daily growth rate formula:

effective daily rate=(1+annual rate)^1/365-1

annual growth rate as given in the question is 70%

effective daily growth rate=(1+0.70)^(1/365)-1

effective daily growth rate =1.001454833 -1

effective daily growth rate=0.001455

effective daily growth rate=0.145483327  %

effective daily growth rate =0.1455%  approximately

The fact that the business is growing at this rate on daily basis is good indicator of business success which must be leveraged upon in the future in order to take the business even to greater heights.

However,the validity of the annual rate of 70% is also very important,whatever parameters used in arriving at 70% needs to be rechecked in order to be on the safe side.

6 0
3 years ago
Crocetti Corporation makes one product and has provided the following information to help prepare the master budget for the next
Andrew [12]

Answer:

The budgeted accounts receivable balance at the end of February is closest to: $4,500.

Explanation:

Prepare a Accounts Receivable Budget for January and February

                                              January           February      

Balance b/d                                $0                $4,200

Credit Sales                           $7,000             $7,500            

Cash Received (40%)           ($2,800)          ($3,000)

Cash Received (60%)                $0               ($4,200)

Balance c/d                           $4,200             $4,500

Conclusion:

Therefore, the budgeted accounts receivable balance at the end of February is closest to: $4,500

4 0
3 years ago
On December​1, Mountain and Meadow Tree Service prepaid $6,600 for six​ months' rent. Give the adjusting entry to record rent ex
DerKrebs [107]

Answer:

Mountain and Meadow Tree services prepaid rent $6,600 on December 1 for 6 months rent.

Note for asset and expense accounts when they increase you debit and when they reduce you credit.

The first entry

On December 1 : Debit Prepaid Rent account for $6,600

Narration: Prepaid rent for 6 months

Balance: $6,600

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6 0
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Chapter 2 Discussion
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Answer:

1. Many people do not trust businesses that sell products online, especially if they are not familiar with the company’s name. Yet they will walk into a new business in their city and shop with little concern. What causes the difference in people’s views of online businesses versus traditional businesses?

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No, it is easier to buy online as the person do not need to expend the same time an energy in going and buying from a mall

3. What is your opinion of Jillian’s comparison between entering a credit card number online and handing the card to a clerk who checks it using a telephone line from the store to the credit card company?  

I agree, it is the same as buying online, as the clerk could commit a crime as well as the person that is in the telephone.

Chapter 2 Discussion

4. What do you think of Toni’s idea of downloading music for free? Do you think this is legal? How can Toni be sure that she is engaging in legal and ethical behavior when she uses the freemusic site?

Is a good idea and it depends in the type of page you are browsing. If the internet page has a disclaimer saying that the music that is offering is free to download and is legal there is no unethical behavor in it.

Explanation:

7 0
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