1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
puteri [66]
3 years ago
7

The following transactions apply to Pecan Co. for 2018, its first year of operations:1. Received $100,000 cash in exchange for i

ssuance of common stock.2. Secured a $300,000 five-year installment loan from State Bank. The interest rate is 5 percent and annual payments are $69,292.3. Purchased land for $100,0004. Provided services for $260,000.5. Paid other operating expenses of $150,000.6. Paid the annual payment on the loan. Round answers to nearest whole dollar.Required:a. Organize the transaction data in accounts under an accounting equation.b. Prepare an income statement and balance sheet for 2018.c. What is the interest expense for 2019? 2020?
Business
1 answer:
tankabanditka [31]3 years ago
6 0

Answer:

Pecan Co.

a. Accounting equation: Assets = Liabilities + Equity

Assets: Cash ($100,000 + 300,000 - 100,000 - 150,000 - 69,292) + Land ($100,000) + Accounts Receivable ($260,000) = Liabilities: Bank Loan ($245,708) + Equity: Common stock ($100,000) + Retained Earnings ($260,000 - 150,000 - 15,000)

b1: Income Statement

Service Revenue       $260,000

Operating expenses    150,000

Interest expense            15,000

Net income                  $95,000

Balance Sheet

Cash                                 $80,708

Accounts Receivable      260,000

Land                                 100,000

Total assets                  $440,708

Bank Loan                    $245,708

Common stock               100,000

Net income                      95,000

Total liabilities+equity $440,708

b2. The interest expense for 2019 is $15,000 ($300,000 * 5%)

The interest expense for 2020 is $12,285.40 ($300,000 +15,000 - 69,292) * 5%.

Explanation:

a) Data and Calculations:

Cash $100,000 + 300,000 - 100,000 - 150,000 - 69,292 = $80,708

Accounts Receivable $260,000

Land $100,000

Common stock $100,000

Bank Loan $300,000 + 15,000 - 69,292 = $245,708

Service Revenue $260,000

Operating expenses $150,000

Amortization Schedule, using an online financial calculator:

Beginning  Interest              Principal Ending

           Balance                                                       Balance

1 $300,000.00 $15,000.00 $54,292.44 $245,707.56

2 $245,707.56 $12,285.38 $57,007.06 $188,700.50

3 $188,700.50 $9,435.02 $59,857.41 $128,843.08

4 $128,843.08 $6,442.15 $62,850.29 $65,992.80

5 $65,992.80 $3,299.64 $65,992.80 $0.0

You might be interested in
A union election was held by the NLRB at Jaxon Industries, and 130 workers cast votes in the election. How many votes in favor o
zimovet [89]

Answer:

66

Explanation:

When union workers vote to elect their representatives, the representative must be elected by a simple majority of the votes. A simple majority means 50% plus 1. In this case 50% of 130 votes = 65 votes plus 1 = 66 votes.

Exclusive representation is a legal status that allows the elected representative the legal right to represent the union workers in different situations, e.g. collective bargaining

7 0
3 years ago
What are the biggest obstacles facing walmart and other foreign retailers in india?
ivanzaharov [21]
Walmart and other foreign retailers in India will face problems related to
• Cultural differences.
• Governmental obstacles will also affect foreign companies to do business in India.
• There are lot of small business competitors that can also pose threat to Walmart and foreign companies.
• People in India, would prefer to buy products from smaller store rather than big shopping mall.
5 0
3 years ago
List 5 store documents pls ASAP​
koban [17]

Explanation:

1. gate pass

2. stock card

3. stock requisition form

4. delivery note

5. stock order form

best regards!!

4 0
3 years ago
A canadian agent has an existing client who goes on vacation to Seattle, Washington. The agent wishes to contact the customer in
Rashid [163]

Answer:

The exception is due to vacation.

Explanation:

This is an example of a right answer, while, yes the individual must be registered in Canada, the exception is due to vacation.

7 0
3 years ago
If Treasury bills are currently paying 5.2 percent and the inflation rate is 2.7 percent, what is the approximate real rate of i
Alexxandr [17]

Answer:

2.43 %

Explanation :

Real Interest rate =  (1 + nominal rate) / (1 + inflation rate) - 1

therefore,

Real Interest rate =  1.052 / 1.027 - 1

                              = 2.43 %

the approximate real rate of interest is 2.43 %

3 0
2 years ago
Other questions:
  • Explain how organizations manage the changing environment​
    14·2 answers
  • In spending all his income on beer and pizza, Fred finds that the marginal utility of the last pizza he consumed is 8, and the m
    8·2 answers
  • Sheridan Incorporated factored $158,900 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesse
    10·1 answer
  • Producers often work to maximize their and make them as large as possible. True or False
    8·2 answers
  • The entry to adjust the accounts for salaries accrued at the end of the accounting period is select one:
    15·2 answers
  • g A constraint to complicated macroeconomic models has been: Group of answer choices that firms do not maximize profits. that ag
    14·1 answer
  • _____ are best described as costs that occur due to political maneuvering by managers to control capital and resource allocation
    14·1 answer
  • Calculate interest amount forR3000<br> 10%p.a paid out every 6months
    14·1 answer
  • Seating Galore sells high-end desk chairs. The variable expense per chair is $85.05 and the chairs sell for $189.00 each. The va
    9·1 answer
  • Following are the transactions of a new company called Pose-for-Pics. Aug. 1 Madison Harris, the owner, invested $11,000 cash an
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!