9:41V1.185G 19%KB/sexpert.chegg.com/qCheggHi Rise obtained planning14permission to build a new officebuilding. Construction commencedon 1 March 20X1. To help fund thecost of this building, a loan for $5mwas taken out from the bank on 1April 20X1. The interest rate on theloan was 10% perannum.Construction of the buildingceased during the month of July dueto an unexpected shortage of labourand materials.By 31 December 20X1, the buildingwas not complete. Costs incurred todate were $12m (excluding intereston the loan).Required: Discuss the accountingtreatment of the above in thefinancial statements of Hi-Rise forthe year ended 31 December 20X1.SkipStart SolvingExit>Training

To discuss the accounting treatment for Hi-Rise in their financial statements for the year ended 31…

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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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Question Content Area Ralston Consulting, Inc., has a $48,000 overdue debt with Supplier No. 1. The company is low on cash, with only $13,440 in the checking account and does not want to borrow any more cash. Supplier No. 1 agrees to settle the account in one of two ways: Option 1: Pay $13,440 now and $45,600 when some large projects are finished, two years from today. Option 2: Pay $67,200 three years from today, when even larger projects are finished. Assuming that the only factor in the decision is the cost of money (10%). (Click here to see present value and future value tables) A. Calculate the present value of each option. Round your present value factor to three decimal places and final answer to the nearest dollar. Present value of Option 1 $fill in the blank 1 Present value of Option 2 $fill in the blank 2 B. Which option should Ralston choose?
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Chapter 3 Financial Mathematics (Exercises) Future Value Calculations Exercise 1: (answers on page 347) 1) A factory purchases new equipment which costs R5,2 million. It depreciates at a rate of 12,5% per annum on a reducing balance. The replacement cost of the equipment escalates at a rate of 7,5% per annum. A sinking fund is set up to pay for the new machinery in 6 years' time. If the sinking fund earns 9% p.a. compounded monthly, determine: a) The book value of the old equipment in 6 years' time. b) The cost of the new equipment in 6 years' time. C) The value the sinking fund must attain, if the book value of the current equipment is used towards the cost of the new equipment. d) The monthly payments that need to be made into the sinking fund if payments commence one month after the current equipment is purchased and will continue until the new equipment is purchased. The
Question 5
Problem #5: A loan of $49,000 is paid off in 36 payments at the end of each month in the following way: Payments of $1225 are made at the end of the month for the first 12 months. Payments of $1225 + x are made at the end of the month for the second 12 months. Payments of $1225 + 2x are made at the end of the month for the last 12 months. What should x be if the nominal monthly rate is 11.8%?
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7:46 PM Ill WiFi 90 Suresh, a recently retired teacher, has requested you to help him select one from the following two proposals before him: Proposal A: To establish and run a primary school From the coming month, he could start a LKG class from a small vacant building owned by one of his relatives, by modifying the same at a cost of Rs.5 lakh. Thereafter at the end of each year, beginning from the first year, a fresh room would be added to the existing building to house the students of KG, first standard, second standard,, till the fifth standard. The estimated expenses for the same would be Rs.4 lakh at the end of the first year which would be rising per year by Rs.1 lakh. For all the years, the average net income per student would be Rs.10, 000 per annum as reckoned at the end of the year and their strength per class would be 20. Suresh is assured of getting a bank loan for all his project expenses at an interest rate of 12 percent. Once the fifth standard completes its first year,…
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