Lion Corp. has a $10,000 par value bond outstanding with a coupon rate of 4.8 percent paid semiannually and 22 years to maturity
. The yield to maturity on this bond is 4.2 percent. What is the dollar price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
1 answer:
Answer:
$10,856.08
Explanation:
For computing the dollar price of the bond we have to applied the present value formula which is to be shown in the attachment below:
Given that,
Future value = $10,000
Rate of interest = 4.2% ÷ 2 = 2.4%
NPER = 22 years × 2 = 44 years
PMT = $10,000 × 4.8% ÷ 2 = $240
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
After applying the above formula, the dollar price of the bond is $10,856.08
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Answer and Explanation:
1. The computation of overhead rate based on direct labor cost is shown below:-
Overhead rate = Overhead applied × 100 ÷ Direct labor cost
= 888 × 100 ÷ 1,200
= 74%
2. The Preparation of job-order cost sheet for the four jobs is shown below:
Particulars Job 86 Job 87 Job 88 Job 89
Beginning balance $6,888 $6,820
Direct materials $3,000 $7,000 $2,100 $1,500
Direct labor $800 $6,000 $900 $500
Applied overhead
is 74% of direct labor $592 $4,440 $666 $370
Total $11,280 $24,260 $3,666 $2,370
3. The computation of ending balances of Work in Process and Finished Goods is shown below:-
Work in process of Job 88 = $3,666
Finished goods = Total of Job 86 + Total of Job 89
= $11,280 + $2,370
= $13,650
4. The computation of the Cost of Goods Sold for March is shown below:-
Cost of goods sold is
= Job 87
= $24,260
