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4 years ago

Clark’s Landscaping bills customers subject to terms 3/20, n/60.

Business

1 answer:

Law Incorporation [45]4 years ago

4 0

Answer: 28.20%

Explanation:

To compute the annual interest rate implicit in the sales discount for thus:

Firstly, we have to calculate the difference that exist between the payment date and the due date and then divide by 365 days which has been given in the question. This will be:

= 60 days - 20 days = 40 days

= 365days/40days

= 9.125%

Secondly, we will then subtract the percentage discount from 100% and then divide the result. Since discount percentage is 3%, this will be:

= 3%/(100% - 3%)

= 3%/97%

= 0.03/0.97

= 0.0309278351

= 3.09%

Lastly, we then multiply the result of the calculations above together in order to get the annualized interest rate. This will be:

= 9.125% × 3.09%

= 28.19625%

= 28.20%

Annualized interest rate. =28.20%

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If Division Inc. expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 uni

Lyrx [107]

Answer:

a) True

Explanation:

Sales = Opening + Production - Closing

$200,000 = $22,000 + Production - $24,000

Production = 202,000 Units

Hence, the answer is a. True

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3 years ago

Goods sold On cash Rs 5000 make journal entries

maks197457 [2]

Answer:

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Explanation:

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3 years ago

On January 1, 20Y8, Crabb & Co. sold land to ASP, Inc. and accepted a two-year, $500,000 face value note as payment. 6% inte

jeka94

Answer:

1. Discount

2. $449,298.47

3. $369,298.47 gain

4. land reduces by $80,000, investment increases by $449,298.47, reserves increases by $369,298.47

Explanation:

Question 1

Using the formula below

$Price=\frac{I_{1}}{1+r} +\frac{I_{2}+F}{(1+r)^{2}}$

where

I = interest rate, which is 6% of 500,000 = 30,000

F = Face value, 500,000

r = borrowing cost = 12%

Therefore, the price of the note at the time it was used for payment was

$Price=\frac{30,000}{1.12} +\frac{30,000+500,000}{(1.12)^{2}}$

= $449,298.47.

As the price is lower than the face value of the note, the note was issued at a discount.

Question 2

The fair market value of the note is $449,298.47, the compute price in question 1.

Question 3

The gain/loss on the sale of the land

= sale price - purchase price

= $449,298.47 - 80,000

= $369,298.47.

Question 4

The transaction would affect Crabb & Co's balance sheet as follows.

Asset side:

land reduces by $80,000

investment increases by $449,298.47

Equity & liabilities side:

reserves increases by $369,298.47

3 0

3 years ago

Roy Gross is considering an investment that pays 7.60 percent. How much will he have to invest today so that the investment will

Reptile [31]

Answer:

He has to invest $16,803.32 so that the investment will be worth $27,000 in six years with a 7.6% interest rate.

Explanation:

Year 6: 27,000

Year 5: 27,000 - (27,000 x 7.6 / 100) = 27,000 - 2,052 = $24,948

Year 4: 24,948 - (24,948 x 7.6 / 100) = 24,948 - 1,896.05 = $23,051.95

Year 3: 23,051.95 - (23,051.95 x 7.6 / 100) = 23,051.95 - 1,751.95 = $21,300

Year 2: 21,300 - (21,300 x 7.6 / 100) = 21,300 - 1,618.80 = $19,681.20

Year 1: 19,681.20 - (19,681.20 x 7.6 / 100) = 19,681.20 - 1,495.77 = $18,185.42

Year 0: 18,185.42 - (18,185.42 x 7.6 / 100) = 18,185.42 - 1,382.10 = $16,803.32

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3 years ago

National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $500,000 on January 1, 2021. The bonds mature o

Jobisdone [24]

Answer:

The price of the bonds $483,841.97

Journal entry:

Dr cash $483,841.97

Dr discount on bonds payable $16,158.03

Cr bonds payable $500,000.00

Explanation:

Using a financial calculator, we determine the bond price by using the following inputs:

N=8(number of semiannual coupons in 4 years=4*2=8)

PMT=22500 (semiannual coupon=face value*coupon rate*6/12= $500,000*9%*6/12=$22,500)

I/Y=5(semiannual yield=10%%*6/12=5%)

FV=500000( the face value is $600,000)

CPT PV=$483,841.97

Bond discount=face value-bond price

Bond discount=$500,000-$483,841.97

Bond discount=$16,158.03

The double entries are to debit cash and discount on bonds payable with $483,841.97 and $16,158.03 respectively while bonds payable is credited with the face value of $500,000

8 0

3 years ago