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Serggg [28]
3 years ago
9

On January 2, 20X4, West Co. issued 9% bonds in the amount of $500,000, which mature on January 2, 20X24. The bonds were issued

for $469,500 to yield 10%. Interest is payable annually on December 31. West uses the interest method of amortizing bond discount. In its June 30, 20X4, balance sheet, what amount should West report as bonds payable?
Business
1 answer:
ehidna [41]3 years ago
5 0

Answer:

$470,425

Explanation:

The computation of the amount reported as bond payable is shown below:

<u>Particulars  Interest at 4.5% Interest at 5%  Amortized  UnAmortized  CV</u>

<u>                                                                             discount     discount </u>

Starting value                                                                        $30,500  $469,500    

                                                              ($500,000 - $469,500)  

June 30         $22,500         $23,475                $975        $29,525  $470,425

  ($500,000 × 4.5%)            ($469500 × 5%)

The six months rate would be the half of the rates given in the question

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Acoma Co. has identified one of its cost pools to be quality control and has assigned $140,400 to that pool. Number of inspectio
katrin2010 [14]

Answer:

Acoma Co.

                                                    Product 1     Product 2

Quality control cost assigned     $58,968        $81,432

Explanation:

a) Data and Calculations:

Cost of quality control = $140,400

Number of annual inspections = 30,000

Cost per inspection = $4.68 ($140,400/30,000)

                                                    Product 1     Product 2     Total

Number of inspections                 12,600          17,400     30,000

Proportion of inspections               42%               58%         100%

Quality control cost assigned   $58,968        $81,432   $140,400

                                   ($4.68 * 12,600)        ($4.68 * 17,400)

                                  (42% * $140,400)       (52% * $140,400)

5 0
3 years ago
Question Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account. You anticipate that
Vanyuwa [196]

Answer:

Deposited amount will decrease by 1% and $2,000

Explanation:

Inflation rate will effect the value of money due to decrease in purchasing power of the currency holder.

We will use following formula to calculate the impact

Nominal rate = Real interest rate + Inflation rate

5% = Real interest rate + 6%

Real interest rate = 5% - 6% = -1%

The deposited amount will be decreased by 1%.

Deposit value = $200,000 x ( 1 - 1% ) = $198,000

Decrease in value = $200,000 - $198,000 = $2,000

6 0
3 years ago
Express Meals is a local bistro that has budgeted inventory purchases as follows: September: $ 300,000 October: $ 350,000 Novemb
ziro4ka [17]

Answer:

Express Meals

The budgeted accounts payable balance on November 30 is:

= $347,000.

Explanation:

a) Data and Calculations:

Budgeted inventory purchases:

September: $ 300,000

October: $ 350,000

November: $ 390,000

Payment to suppliers:

Month of purchase = 20%

Month following purchase = 70%

Two months after purchase = 10%

                                                   September    October   November  Total

Purchase                                     $300,000   $350,000    $390,000 $1,040,000

Payments:

Month of purchase  (20%)             60,000        70,000         78,000  $208,000

Month following purchase (70%)                     210,000      245,000  $455,000

Two months after purchase (10%)                                         30,000  $30,000

Total payments                             60,000      280,000      353,000  $693,000

Outstanding balance ($1,040,000 - $693,000) = $347,000

6 0
2 years ago
What is your reaction to Harriet's suggestion of using the cost of debt only?
Ahat [919]

Answer:

No, it is a bad idea to use only the cost of debt

Explanation:

Only using the cost of debt, is not a good idea because too much amount of borrowing could lose the confidence of the investors and it could lead to the uncertainty in the future cash flows.

Suppliers might be worried regarding the financial situation and lead to the supply disruption. Though, the debt might save the tax expenses, which could lead to the negative cash flow.

When the company does not have adequate amount of cash at hand, it could cause many disruptions of financial. WACC (Weighted Average Cost of Capital) rates need to be used as the capital costs as it weigh the used capital cost and the used debt.

8 0
3 years ago
It took her 9 more months but Marina has managed to save the full $650 plus more to cover fees to pay off the pay-day loan compa
kondaur [170]
Considering the 47% APR which is compounded daily, after 9 months or 275 days Marina should pay $925.98 to pay off her loan.
7 0
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