Answer: $3,704,040
Explanation:
The issue/ selling price of a bond is calculated by the formula:
= Present value of coupon payments + Present value of face value
The coupon payments will be an annuity and in cash terms are:
= 8% * 4,500,000
= $360,000
Selling price:
= (360,000 * Present value of an ordinary annuity factor, 11%, 10 periods) + (4,500,000 * Present value discount factor, 11%, 10 periods)
= (360,000 * 5.889) + (4,500,000 * 0.352)
= $3,704,040
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Answer:
As assets but separately from other receivables.
Explanation:
When a company lends money to its employees, managers or affiliated companies, or sells goods or services to them, it must report those accounts or notes receivables in a separate account than normal transactions carried out with external customers. This happens because the transactions must be verifiable to check if they were legal and followed the proper procedures, and at what price or interest rate were they carried out. E.g. a corporation that lens $10 million to its CEO at 1% interest rate is not doing things properly and that transaction should be reversed and proper interest rates must be charged.
Credit card bill from ABC credit have listed a number of expenses made, these needs to be posted according to the relevant accounting heads.
<h3 /><h3>What is Accounting?</h3>
Accounting is the calculation of cash, in other terms it is the study of debit and credit. The accounting teaches the treatment of different transactions, the transactions are divided in different heads, asset, expense, income, liability and capital.
T Accounts should be made as follows.
Assets
DR $1500 Computers
DR $650 Furniture
DR $334 Van Payment
Expenses
DR $420 Office Supplies
DR $250 Electric Company
DR $100 Water
DR $250 Office Supplies
Petty Expenses
DR $150 Steak House
DR $100 Fuel Stop
The expenses are distributed among the heads that they are relevant to, petty expenses only contains the payment for expenses that are immaterial in nature and amount, Asset account have the payments made for assets.
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Answer:
Xia Co.
1-a. The relevant costs for Xia Co. to make or buy the part:
Direct materials $2.25
Direct labor 1.00
Incremental overhead 0.75
Total relevant cost $4.00
1-b. Xia should make the part. It will cost Xia $4.00 to make the component while it costs it $5.00 to buy. It should therefore, make the component.
Explanation:
a) Data and Calculations:
Price of buying component = $5
Cost of making component:
Direct materials $2.25
Direct labor 1.00
Incremental overhead 0.75
Total relevant cost $4.00
b) The relevant cost for making the component is $4.00. The overhead cost based on 200% direct labor is not a relevant cost. It is an allocated fixed cost and must be incurred whatever decision is taken. By making the component, Xia Co. will be netting in a unit contribution of $1 ($5.00 - $4.00) with the alternative of buying.
