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Shkiper50 [21]
3 years ago
6

On January 1, 20X4, Parke Company borrowed $360,000 from a major customer evidenced by a non-interest bearing note due in three

years and Parke did not elect the fair value option. Parke agreed to supply the customer's inventory needs for the loan period at lower than market price. At the 12% imputed interest rate for this type of loan, the present value of the note is $255,000 at January 1, 20X4. What amount of interest expense should be included in Parke's 20X4 income statement
Business
1 answer:
Sonbull [250]3 years ago
5 0

Answer:

Parke Company

The amount of interest expense should be included in Parke's 20X4 income statement is:

= $30,600.

Explanation:

a) Data and Calculations:

3-year Non-interest bearing note payable = $360,000

Imputed interest rate for this type of loan = 12%

Present value of the loan = $255,000

Interest expense as of December 31, 20X4 = $30,600 ($255,000 * 12%)

b) The interest expense is based on the present value of the loan and not on the future value of the note payable.  Therefore, the interest expense for each of the three years will not be the same amount but will continue to increase as the present value changes from one year to the next.

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Jones Lumber Co. has annual fixed costs including depreciation of $300,000 and variable costs that are 88.25 percent of sales. W
STALIN [3.7K]

Answer:

$2,553,191

Explanation:

The formula to compute the break even point in dollars amount is presented below:

= (Fixed cost ) ÷ (Profit volume ratio)

where,  

Fixed cost = $300,000

And the profit volume ratio would be

= (Contribution margin) ÷ (Sales) × 100

We assume the sales be 100%

So, the variable cost is

= 88.25%

And, the contribution margin is

= 100 - 88.25

= 11.75%

So, the break even sales would be

= $300,000 ÷  11.75%

= $2,553,191

7 0
3 years ago
The English economist David Ricardo argued that Group of answer choices None of the answers is correct grain prices were high be
Andrei [34K]

Answer:

land rents were high because grain prices were high..

Explanation:

grain prices were high because land rents were high.

land rents were high because grain prices were high.

grain prices were high because land rents were low.

land rents were high because grain prices were low.

none of the above

David Ricardo was a classical economist known for various economic theory. Some of his theories include :

  1. Labour Theory of Value
  2. Ricardian Equivalence
  3. Theory of comparative advantage
  4. Theory of rent

Theory of rents

David Ricardo defined rest as the part of the produce of an agricultural land that is paid to the landowner for the use of the land.  He postulated that  benefits of an increase in prices of grain accrue to land owners in the form of rent

He used this theory to answer a question that arose during the Napoleonic wars (18.05-1815)  when there was a great increase in corn and land prices. The question was : Did the rise in land prices raise the price of corn or did the high price of corn increase the demand for land and led to an increase in the price of land ?

5 0
3 years ago
The scenario in which students sleep in their bedrooms from 2:00
mash [69]
That’s a busy day lol. The person slept from 2-9am slept for 7hours. The 3:30-4 slept for 30minutes.
7 0
3 years ago
eriod costs ________. should be treated as an indirect cost rather than as a direct manufacturing cost seldom influence financia
Serhud [2]

Answer:

include the cost of selling, delivering, and after-sales support for customers

Explanation:

The period cost is the cost which includes the major part of the selling and admin expenses plus it is also not capitalized and can be incurred according to the passage of time

So as per the given situation, the third option is correct as it includes the selling, delivering cost and after sales support

Therefore all the other options are wrong

6 0
3 years ago
In a $1031 like-kind exchange, Rafael exchanges a business building that originally cost $346,800. On the date of the exchange,
Andreyy89

Answer:

A. $52,020

B. $0

C. $208,080

Explanation:

a. Computation of Rafael's realized gain on the exchange

Using this formula

Realized gain=Fair market value -Adjusted basis

Let plug in the formula

Realized gain= $190,740-$138,720

Realized gain=$52,020

Therefore a. Rafael's realized gain on the exchange is $52,020

b. Based on the information given Rafael's recognized $1031 gain is $0 reason been that

NO BOOT WAS RECEIVED

c. Computation for Rafael's $1245 depreciation recapture Amount

Using this formula

Depreciation recapture Amount=Equipment originally cost -Adjusted basis

Let plug in the formula

Depreciation recapture=$346,800-$138,720

Depreciation recapture=$208,080

Therefore Rafael's $1245 depreciation recapture of $208,080 is carried over to the replacement property

4 0
3 years ago
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