On December 31, 2017, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $102,049, accepting $40,000 do
wn and agreeing to accept the balance in four equal installments of $20,000 receivable each December 31. An assumed interest rate of 11% is imputed. Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes.
1 answer:
Answer:
Loan Amortization Table is attached with this answer, please find it
Explanation:
First of all we calculate the Loan Payment per period
Loan Payment per year = r ( PV ) / 1 - ( 1 + r )^-n
Loan Payment per year = 0.11 ( (102,049 - 40,000 ) / 1 - ( 1 + 0.11 )^-4
Loan Payment per year = $6,825.39 / 0.341269 = 20,000 per year
You might be interested in
Answer:
The company should accept the idea because profit will increase by $24,000.
Explanation:
A company is currently selling 10,000 units of product monthly for $40 per unit.
The unit contribution margin is $27.
The company believes that spending $50,000 per month on advertising will allow them to increase the selling price to $45 and that sales will increase by 750 units per month.
The unit contribution margin is the difference between selling price and variable cost per unit.
An increase in the selling price of $5 will cause the contribution margin to increase by $5, from $27 to $32.
Profits is the product of contribution margin and number of output.
At initial price, the profit was
=
= $270,000
At the new price the profit will be
= - $50,000
= $344,000 - $50,000
= $294,000
The increase in profit
= $294,000 - $270,000
= $24,000