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oksano4ka [1.4K]
3 years ago
11

Colt Football Co. had a player contract with Watts that is recorded in its books at $5,600,000 on July 1, 2014. Day Football Co.

had a player contract with Kurtz that is recorded in its books at $7,000,000 on July 1, 2014. On this date, Colt traded Watts to Day for Kurtz and paid a cash difference of $700,000. The fair value of the Kurtz contract was $8,400,000 on the exchange date. The exchange had no commercial substance. After the exchange, the Kurtz contract should be recorded in Colt's books at
Business
1 answer:
vlada-n [284]3 years ago
7 0

Answer:

the amount after the exchange is $6,300,000

Explanation:

The computation of the amount after the exchange is as follows;

= Book value + cash paid

= $5,600,000 + $700,000

= $6,300,000

Since it has no commerical substance so no loss or no gain is recorded

hence, the amount after the exchange is $6,300,000

Therefore the same is to be considered

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Presented below are two independent situations.
rewona [7]

Answer: a)Interest expense for Year 2020=$46, 977.50 b) see explanation column

Explanation:

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Present Value  factor for 3 years at 12%

= PV = 1/(1+r) ^n  

1/ (1+ 12%)^3 =(0.892857143)^ 3 =  0.71178

Present value of Note for land at 2020 = $550,000  x  0.71176 = $391, 479

.136

Interest expense for Year 2020= $391, 479.136  x  12%= $46, 977.50

b) Face value of note = $5,000,000

Present value factor for 4 years at 10 % =

= PV = 1/(1+r) ^n  

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Present value of the note = $5,000,000 x 0.68301345= $3,415,067.28

Discount on note payable =$5,000,000 -$3,415,067.28 =$1,584,932.72

Journal to record amount of interest to report for 2020

Date   Account                        Debit                      Credit

Jan 2020   Cash                  $5,000,000

Discount on notes payable                             $1,584,932.72  

Notes payable                         $5,000,000

interest revenue                                              $1,584,932.72

5 0
3 years ago
. My typing speed isn't as fast as I would like, but this position doesn't require me to use the computer. b. To tell the truth,
AlekseyPX

Answer:

b

Explanation:

7 0
3 years ago
Pittsburg Steel Manufacturing has a weighted-average unit contribution margin of $20 for its two products, Standard and Supreme.
pickupchik [31]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

The weighted-average unit contribution margin of $20.

Expected sales for Pittsburg Steel are 40,000 Standard and 60,000 Supreme.

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First, we need to calculate the break-even point in units for the whole company.

Break-even point (units)= Total fixed costs / Weighted average contribution margin ratio

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<u>Now, for each product:</u>

Standard= (40,000/100,000)*90,000= 36,000 units

Supreme= (60,000/100,000)*90,000= 54,000 units

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Hope it helps!:)
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2 years ago
What is a minimum balance when it comes to account requirement?
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