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charle [14.2K]
3 years ago
5

On July 1, 2021, Markwell Company acquired equipment. Markwell paid $175,000 in cash on July 1, 2021, and signed a $700,000 noni

nterest-bearing note for the remaining balance which is due on July 1, 2022. An interest rate of 5% reflects the time value of money for this type of loan agreement. (PV of $1, PVA of $1) (Use appropriate factor(s) from the tables provided.) For what amount will Markwell record the purchase of equipment? a) $834,048. b) $841,666. c) $741,666. d) $875,000.
Business
1 answer:
MAVERICK [17]3 years ago
8 0

Answer: b) $841,666.

Explanation:

Markwell will record the equipment at the present value of the amounts spent to purchase it.

Present value of the cash paid = $175,000

Present value of the noninterest-bearing note after a year = 700,000/(1 + 5%)

= $666,667

Total = 175,000 + 666,667

= $841,667

As per the options;

= $841,666

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Answer: $294,000

Explanation:

Gift of $71,000 is <u>time restricted</u> as it cannot be spent for 4 years.

Gift of $91,000 is <u>purpose restricted</u> as it must be used for the purpose of salaries.

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Income earned from the above gift of $11,000 is <u>purpose restricted</u> for needy families.

The gifts with donor restrictions total:

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3 0
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Answer:

There is loss of $109,120

Explanation:

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​

4 0
3 years ago
Read 2 more answers
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Answer:

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Explanation:

The July 6 entry is difficult to decide the correcting entry since the wrong amount was not given.  There is nothing that can be done with the $160 supplied in the question.

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3 years ago
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