Please helpGNatalie and Curtis have been experiencing great demand for their cookies and muffins. As a result, they are now thinking about buyinga commercial oven. They know which oven they want and that it will cost $22,100. The company already has $6.500 set aside for thepurchase and will need to borrow the rest.►Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $15,600 onNovember 1, 2023, for a period of 3 years at a 5% interest rate. The terms provide for fixed principal payments of $2,600, on May 1and November 1 of each year plus 6 months of interest.(a)Prepare a payment schedule for the life of the note. (If answer is 0, please enter O. Do not leave any fields blank)

For Cookie & Coffee Creations Inc.,Cost of a commercial oven - $22,100Accumulated savings -…

Answered: Natalie and Curtis have been…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Natalie and Curtis have been experiencing great demand for their cookies and muffins. As a result, they are now thinking about buying a commercial oven. They know which oven they want and that it will cost $17,000. The company already has $5,000 set aside for the purchase and will need to borrow the rest. Natalie and Curtis met with a bank manager to discuss their options. She is willing to lend Cookie & Coffee Creations Inc. $12,000 on November 1, 2020, for 3 years at a 5% interest rate. The terms provide for fixed principal payments of $2,000 on May 1 and November 1 of each year plus 6 months of interest. For Part II of the assignment, complete the tasks listed below. Prepare a payment schedule for the life of the note. Prepare the journal entry for the purchase of the oven and the issue of the note payable on November 1, 2020. Prepare the journal entries on May 1 and November 1 for the note. Determine the current portion of the note payable and the long-term portion of the…
The following is an excerpt from a conversation between Mark Loomis and Krista Huff. Mark is debating whether to buy a stereo system from Tru-Sound Systems, a locally owned electronics store, or Wholesale Stereo, an online electronics company.Mark: Krista, I don’t know what to do about buying my new stereo.Krista: What’s the problem?Mark: Well, I can buy it locally at Tru-Sound Systems for $1,175.00. However, Wholesale Stereo has the same system listed for $1,200.00.Krista: What’s the big deal? Buy it from Tru-Sound Systems.Mark: It’s not quite that simple. Wholesale Stereo charges $49.99 for shipping and handling. If I have Wholesale Stereo send it next-day air, it’ll cost $89.99 for shipping and handling.Krista: So?Mark: But, that’s not all. Tru-Sound Systems will give an additional 2% discount if I pay cash. Otherwise, they will let me use my VISA, or I can pay it off in three monthly installments. In addition, if I buy it from Tru-SoundSystems, I have to pay 9% sales tax. I won’t…
Susan plans on selling her mugs. She has created two scenarios and wants to know which will provide her the better profit. In order to help her figure this out, she asks you to figure out when the two options are the same. Option 1: Sells at a local store. It costs her $445 for a shelf at the store, but it's in an upscale neighborhood that gets lots of foot traffic so she can sell the mugs for $30 in profit. Option 2: Sell at the local farmers market. It costs her $100 for a booth, but busy can vary quite a bit. She figures she call sell the mugs for a $7 profit. When are the two options the same?
Kowkeela has recently opened The Cooker Shop, a store that specializes in one type of cooker. Kowkeela has just received a degree in business and she is anxious to apply the principles she has learned to her business. In time, she hopes to open a chain of cooker shops. As a first step, she has prepared the following analysis for her new store:Sales price per cooker . . . . . . . . . . . $50Variable expenses per cooker. . . . . . $16Fixed expenses per year:- - - Building rental . . . . . . . . . . . . . . $12000- - - Equipment depreciation . . . . . . $5300- - - Selling . . . . . . . . . . . . . . . . . . . . . $15500- - - Administrative . . . . . . . . . . . . . . $17000 d. Refer to the original data, the number of cookers to be sold each year to break even is (f)Refer to the original data, Kowkeela now has two salespersons working in the store—one full time and one part time. It will cost her an additional $7700 per year to convert the part-time position to a full-time position.…
Problem:Ana and Maria decide to open a bagel shop. When they do the calculation, they found out that if they buy from the local bakery they will need airtight containers at a fixed cost of P5000 annually. They can buy the bagels for P2 each. If they make the bagels in-house they will need a small kitchen at a fixed cost of P5500 annually. It will cost them $1 per bagel to make. Question: 1. How many bagels do they need to sell to have? Show your solution thank you!
Ramona Garcia will be remodeling her kitchen before she places her home on the market to sell. She researched what three local companies would charge her for the remodeling and their best financing option for each company. Her research revealed the following results. Company Total Remodeling Cost Financing Terms Ramona is Considering Large Home Improvement Store $13,200 Financing through the bank servicing the national home improvement company: 1 year 0% financing with a minimum monthly payment of $100; 16.99% APR for the remaining 3 years Local Small Business Home Improvement Company $11,800 Financing through her local credit union: 3% origination fee to be paid first then 7.5% APR for 5 years Online Construction Business $10,200 Financing through an online banking service: $1,000 applied toward the project before payback begins then 11.9% APR for 4 years. Calculate the monthly payments for 2 of these options given that interest is compounded monthly. What…
Gloria is planning on opening a cake shop. She has found a location that rents for $15,550 per year and it will cost her another $13,716 to furnish the shop and purchase all the necessary equipment. She plans on charging $20 for a cake and it will cost her $3 per cake for ingredients and $1.92 per cake for decorations and $1.59 per cake for the beautiful, colorful to-go boxes. What is the dollar breakeven point she will need to earn to cover her costs in the first year? Round to the nearest whole number.
Joe Latte completed a business plan and determines that it will take$120,000 to open the coffee and gelato shop. He has $30,000 of his ownmoney and will have to obtain $90,000 in loans or grants. How should Joego about getting financing? What is the probability that he can obtain agrant to start a combination coffee and Italian ice cream shop?
Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufacturessophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which isprivately owned, has approached a bank for a loan to help it finance its growth. The bank requires financialstatements before approving such a loan. You have been asked to help prepare the financial statements andwere given the following list of costs:1. Depreciation on salespersons’ cars.2. Rent on equipment used in the factory.3. Lubricants used for machine maintenance.4. Salaries of personnel who work in the finished goods warehouse.5. Soap and paper towels used by factory workers at the end of a shift.6. Factory supervisors’ salaries.7. Heat, water, and power consumed in the factory.8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.)9. Advertising costs.10. Workers’ compensation insurance for factory employees.11. Depreciation on chairs…
Ashley is a fresh graduate and is now planning to start a new business. She would run an online shop to sell snacks imported from Japan. She expects the annual purchase cost would be $380,000 and the annual sales would be $790,000. Four sets of computers are needed, which cost $7,000 each and could be sold at half price in the second-hand market after one year. She has to rent a small office, which costs her $19,000 per month. (i) Calculate the annual accounting profit of Ashely's snack business. (ii) Ashley will be involved in the daily operations of this snack business and has to give up the opportunity to get a full-time job. În consideration of annual economic profit, in what condition should Ashley start this business? Explain with relevant figures.
John Benson and Jerry Chen, the owners of J&J Bagel, Inc., have decided that it is time to acquirea bigger store to expand their operations. John and Jerry have identified a suitable structure that iscurrently for sale, and they believe they can buy and refurbish it for about $2.2 million. John and Jerry arenow ready to meet with Charlene Mons, the loan officer for Blue Hills Bank. The meeting is to discussthe mortgage options to the company to finance the new store.Charlene begins the meeting by discussing a 30-year mortgage. The loan would be repaid in equalannual installments. Because of the previous relationship between J&J Bagel and the bank, there wouldbe no closing costs for the loan. Charlene states that the interest rate of the loan would be 7 percent. Johnasks if a shorter mortgage loan is available. Charlene says that the bank does have a 15-year mortgageavailable at the same interest rate.Jerry decides to ask Charlene about a “bullet loan” he discussed with a…
Kath is considering investing 500,000.00 to open a Milk Tea Station near a mall. Based on her feasibility study, she can sell 12 large size of milk tea per hour at a price of 25.00 per bottle. She is planning to hire 2 crews, with an hourly rate of 25.00, to manage the store which will operate 8hours per day, 6 days per week, and 50 weeks per year. However, additional out-of-pocket miscellaneous cost is 8,500.00 per month. More so, she wanted to have her crews a 2-week vacation every year with pay. If the capital now is earning 15% annually and she must write off her investment within 5 years with desire rate of return of at least 20% on his investment, would you recommend the investment? Use the rate of return method and annual worth method in making your decision.

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