1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Sav [38]
3 years ago
14

On July 1, Goblette Company sold some machinery to another company. The two companies entered into an installment sales contract

at a predetermined interest rate. The contract required 5 equal annual payments with the first payment due on July 1, the date of sale. What present value concept is appropriate for this situation
Business
2 answers:
malfutka [58]3 years ago
7 0

Answer:

The value of all future payments discounted by the interest rate

Explanation:

Since the purchase of the asset is by installments to be paid in the future. The present value to be recognized is the sum of the future payments discounted at the predetermined interest rate.

The first payment due now will not have to be discounted but future payments will have to be discounted to ascertain the present value of the asset to be recognized in the balance sheet.

Nuetrik [128]3 years ago
5 0

Answer: Present Value of an annuity due of $1 for 5 periods

Explanation: Annuity could be described as a sort of investment which entitles the investor to receive a certain sum of money annually. Secondly, the present value of annuity refers to the current value of the payments to be paid from an annuity or future value payments paid from an annuity. It means "how much money would be needed today to fund a series of future annuity payments".

From the question above, the contract requires 5 equal annual amount, which is the period.

Therefore, the most appropriate present value concept will be:

Present Value of an annuity due of $1 for 5 periods

You might be interested in
Which is the best measure of risk for a single asset held in isolation (Stand Alone Investment), and which is the best measure f
borishaifa [10]

Answer:

  • Single asset = Coefficient of Variation
  • Portfolio = Beta

Explanation:

When dealing with standalone risk, coefficient of variation is best because it shows the amount by which the asset's returns might deviate from the average returns of the market.

As for portfolio assets that are well diversified, the best measure would be beta because diversified portfolios deal with systematic risk and beta shows the movement of the portfolio in relation to the market and so will show that systematic risk.

4 0
3 years ago
When buyers refuse to pay a product’s stated price or when improvements in other items or fashion changes reduce the appeal of t
blsea [12.9K]

Reduction in the price. If they do not reduce the price, then people will not buy the product, and they will be left with too many of the same products. 


5 0
3 years ago
Moss County Bank agrees to lend the Oriole Company $560000 on January 1. Oriole Company signs a $560000, 6%, 9-month note. What
Vitek1552 [10]

Answer:

The Journal entry that Oriole Company will make to pay off the note and interest at maturity assuming that interest has been accrued to September 30 will be:

Dr Notes Payable 560,000

Dr Interest Payable 25,200

(560,000*6%*9/12)

Cr Cash 585,200

(560,000+25,200)

Explanation:

Based on the information given where Moss County Bank agrees to lend the Oriole Company $560000 on January 1 this means we have to Debit Note payable with 560,000 and since Oriole Company signs a $560000, 6%, 9-month this means we have to Debit Interest payable with 25,200 (560,000*6%*9/12) and Credit Cash with 585,200 (560,000+25,200).

4 0
3 years ago
Joe and karina depend on both of their salaries to afford their mortgage. karina recently lost her job and they are worried that
WINSTONCH [101]

Answer:

The Communication Privacy Management Theory

Explanation:

The Communication Privacy Management Theory studies the ways that people think about and make decisions surrounding how to reveal or hide private information.

7 0
3 years ago
The marketing department at your company has promised your customers that the next software release will show a 1.66-fold perfor
timurjin [86]

Answer

The answer and procedures of the exercise are attached in the images below.

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in 2 sheets with the formulas indications.  

4 0
3 years ago
Other questions:
  • The failure to record a purchase of mer chandise on account even though the goods are properly included in the physical inven to
    15·1 answer
  • A firm that would like to develop a global supply chain would: Manufacture components or supplies in other countries. Sell raw m
    12·1 answer
  • The following information is available for Fuller Manufacturing Company for the month ending October 31:_______.
    14·1 answer
  • On June 30, Collins Management Company purchased land for $460,000 and a building for $520,000, paying $360,000 cash and issuing
    8·1 answer
  • Jones Corporation purchased merchandise inventory with a 10%, 120-day note payable for $10,000. The company uses the perpetual i
    14·1 answer
  • Describe the population growth curve of houseflies
    12·1 answer
  • Beyer Company is considering the purchase of an asset for $215,000. It is expected to produce the following net cash flows. The
    11·1 answer
  • Sixx AM Manufacturing has a target debt—equity ratio of 0.55. Its cost of equity is 16 percent, and its cost of debt is 10 perce
    11·1 answer
  • Your cousin has asked you to bankroll his proposed business painting houses in the summer. He plans to operate the business for
    15·1 answer
  • Accounting and financial reporting for state and local governments use, in different places, either the economic resources measu
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!