Answer:
We can rent 1,070.6 videos or purchase 1,338.25 pizzas or any combination between the budget line attached
Explanation:
We have to divide our income for the cost of each item and them draw the budget line
$5,353 / 5 = 1,070.6
$5,353 / 4 = 1,338.25
Answer:
Date Account title Debit Credit
12/31/2019 Lease Receivable $175,934
Cost of Goods sold $120,000
Sales Revenue $175,934
Inventory $120,000
Date Account title Debit Credit
12/31/2019 Cash $40,800
Deposit Liability $40,800
The rental amount is constant and is made on the first day of the lease period so this is an annuity due.
As the collectability is probable, you need to find the present value of this lease:
= 40,800 * Present value of annuity due factor, 5 year, 8%
= 40,800 * 4.3121
= $175,933.68
= $175,934
