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olganol [36]
2 years ago
6

Assume that Mahmood Corp. lends Ahmad $10,000 in exchange for a $10,000,

Business
1 answer:
kolezko [41]2 years ago
7 0

Answer:

1) the present value of the note:

PV of face value = $10,000 / (1 + 8%)³ = $7,938.32

PV of interest payments = $1,000 x 2.5771 (PV annuity factor, 8%, 3 periods) = $2,577.10

PV of note = $10,515.42

2) Dr Notes receivable 10,515.42

         Cr Cash 10,000

         Cr Discount on notes receivable 515.42

3) assuming the loan was made January 2, 2021

Date                         Cash flow     Discount         Balance

January 2, 2021       -$10,000                             $10,515.42

January 2, 2022       $1,000        $171.81            $10,343.61

January 2, 2023       $1,000        $171.81             $10,171.80    

January 2, 2024       $11,000       $171.80                  $0

4) December 31, accrued interest on notes receivable

Dr Interest receivable 1,000

Dr Discount on notes receivable 171.81

      Cr Interest revenue 1,171.81

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You are on your daily jog when a car negligently pulls in front of you. Unable to stop, you run
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<u>medically speaking, Yes!</u>

Explanation:

Since the scenario only <em>involves the individual running into the car, not the car hitting the individual</em>; meaning that he'll have less severe injuries.

To be able to recover from the harm done, the individual may need first aid treated.

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A student deposits $1,642 in the bank that pays 6.2% interest yearly (using yearly compounding). After 5 years he withdraws the
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the perpetuity will pay the student 166.36 dollar per years

Explanation:

First, we solve for the amount of the original investment after 5 years:

Principal \: (1+ r)^{time} = Amount

Principal 1,642.00

time 5.00

rate 0.06200

1642 \: (1+ 0.062)^{5} = Amount

Amount 2,218.17

<u>Then, this goes into a perpetual annuity at 7.5%</u>

2,218.17 x 0.075 = 166.3630983 = 166.36

the perpetuity will pay the student 166.36 dollar per years

6 0
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All of the following are the names of the three major credit bureaus EXCEPT
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On January 1, 2018, Friendly Farm Company purchased a new machine at a cost of $350,000. The machine has an estimated useful lif
schepotkina [342]

Answer:

Friendly Farm Company

Schedule of Straight-line, Units of Production, and Double Declining Balance:

                             Straight-line     Units of Production    Double Declining

Year 1 Book value   $350,000        $350,000                               $350,000

Depreciation Exp.     $80,000          $96,000 (30,000*$3.20)      $175,000

Year 2 Book value $270,000        $254,000                                 $175,000

Depreciation Exp.    $80,000           128,000 (40,000*$3.20)          87,500

Year 3 Book value $190,000         $126,000                                  $87,500

Depreciation Exp.   $80,000             64,000 (20,000*$3.20)          43,750

Year 4 Book value $110,000           $62,000                                  $43,750

Depreciation Exp.    80,000              32,000 (10,000*$3.20)         $13,750

Residual value       $30,000           $30,000                                  $30,000

Explanation:

a) Data and Calculations:

Cost of new machine = $350,000

Estimated useful life = 4 years or 100,000 hours

Residual value = $30,000

Usage of machine:

Year 1 = 30,000 hours

Year 2 = 40,000 hours

Year 3 = 20,000 hours

Year 4 = 10,000 hours

Units of Production = $320,000/100,000 = $3.20 per unit

Depreciable amount = $320,000 ($350,000 - $30,000)

Straight-line method, Depreciation per year = $80,000 ($320,000)

= 25% (100/4).

Depreciation expense, using Double-Declining Balance rate = 25% * 2 = 50%:

Year 1 = $350,000 * 50% = $175,000

Year 2 = $175,000 * 50% = $87,500

Year 3 = $87,500 * 50% = $43,750

Year 4 = $13,750 ($43,750 - $30,000)

b) These different methods still arrive at the same end result as shown above.  Note that depreciation is an accounting estimate which spreads the cost of an acquired long-term asset over its useful life.

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