Answer:
C) In today's dollars, Chang Lee's money is worth more than Soo Lee's
Explanation:
The present value of receipts 6 year hence of amount $20,000 discounted at 7% rate would be: Discounting factor of 1 $ for 6 years at 7 % i.e expressed as:
= 20,000 × 0.6663
= $ 13,327 approx
The present value of $20,000 receipts 9 years hence discounted at 7% rate is given by:
= 20,000 × 0.5439
= 10,879 approx.
As is evident from above, Chang Lee's present value of receipts is more than those of Soo Lee's.
Answer:
Account receivable on July 31 = $261,800
Explanation:
We would not be making use of the information for June as the question says 60% is collected in the month of sale and 40% is collected in the following month . Therefore as at July 31, all of june sales would have been collected and won't be outstanding
July credit sales = 85% * $770,000 = $654,500
Collected in July (60%) = 60% * $654,500 = $392,700
Receivable as at 31 July = $654,500 - $392,700 = $261,800
Answer:
a. $18,000
Explanation:
Data given
Face value = $600,000
Bonds = 12%
The computation of accrued interest payable is shown below:-
Accrued interest to be reported as at Dec 31 = Face value × Interest rate × Time period (From July to September)
= $600,000 × 12% × (3 ÷ 12)
= $600,000 × 3%
= $18,000
Therefore for computing the accrued interest payable we simply applied the above formula.
Answer:
$2,000
Explanation:
The recognized gain is computed below:
Recognized gain = Received amount from the insurance company - Alex basis in car value
= $22,000 - $20,000
= $2,000
The recognized gain shows a difference between the received amount and his basis in car
The other information which is mentioned is ignored as it is not relevant for the computation part