Harte Systems, inc., a maker of electronic survelliance equipment, Is considering selling to a well- known hardware chain the rights to market its home security system. The proposed deal calls for the ardware chain to pay Harte $30,000 and $25,000 at the end of years 1 and 2 and to make annual year-end payments of $15,000 in years 3 through 9. A final payment to Harte of $10,000 would be due at the end of rear 10.
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- Cablevision has been approached by the City of Miranda to run its cable operations in 2023. After negotiating with key parties, CableVision has made the following agreements: It will offer Mirada residents a basic set of 25 cable television stations at a rate of $46.50 per month. It will pay the city $1,400,000 per year plus $4.12 per cable subscriber per month to maintain the physical facilities. It will pay another company a monthly fixed fee of $70,000 plus $8.25 per cable subscriber per month to broadcast the 25 channels. CableVision estimates that operating costs for billing, program news mailings, etc. will be $125,000 per month plus 8% of monthly revenue. CableVision has several questions about its monthly revenues, costs, and profits in 2023. 1. Assuming a tax rate of 32%, how many monthly subscribers would be required for CableVision to earn $297,000 per month in 2023? 2. Some of CableVision's managers are uncertain about their estimate of monthly fixed operating costs.…The Moustache Company is replacing most of the windows in its Alden factory by purchasing them under a note agreement with the Blattner Window Design Company on January 1, 2019. Moustache financed $37,908,000, and the note agreement will require $10 million in annual payments starting on December 31, 2019 and continuing for a total of four more years(final payment December 31, 2023). Blattner will charge Moustache the market interest rate of 10% compounded annually. What is the amount of the 2020 interest expense? A. $3,290,800 B. $2,790,800 C. $4,000,000 D. $3,169,880ABCompany contracted with XYZ Corporation to construct custom-made equipment. The equipment was completed and ready for use on January 1, 2021. ABCompany paid for the machine by issuing a $200,000, three-year note that bears interest at the rate of 4% , payable annually on December 31 each year. Since the machine was custom-built, the cash price was unknown. However, when compared to similar contracts, 10% was deemed to be a reasonable rate of interest. Required: 1) Prepare the journal entry by ABCompany to record the purchase of equipment. 2) Prepare journal entries to record interest for each of the first two years.
- ndustrial Electric Services has a contract with an embassy in Mexico to provide maintenance for scanners and other devices in the building. What is the present worth of the contract (in year 0) if the company will receive a total of nine $8,000 payments beginning in year 2 and ending in year 10 and the interest rate is 6% per year. The present worth of the contract for the company is $McClelland Corporation agreed to purchase some landscaping equipment from Agri-Products for a cash price of $500,000. Before accepting delivery of the equipment, McClelland learned that the same equipment could be purchased from another dealer for $460,000. To avoid losing the sale, Agri-Products has offered McClelland a “no interest” payment plan—McClelland would pay $100,000 at delivery, $200,000 one year later, and the final $200,000 in two years. Use the following links to the present value tables to calculate answers.(PV of 1, PVAD of 1, and PVOA of 1) (Use the appropriate factor(s) from the tables provided.) Required: McClelland would usually pay 9% annual interest on a loan of this type. What is the present value of the Agri-Products loan at the delivery date? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar.) What journal entry would McClelland make if it accepts the deal and buys from Agri-Products? (If no entry is required for a…SAPPHIRE CO. charges new franchisees an initial fee of P5,000,000. Of this amount, P2,000,000 is payable in cash when the agreement is signed, and the remainder is to be paid in three equal annual installments which are evidenced by an interest-bearing promissory note. In consideration therefore, SAPPHIRE CO. will assist in locating the business site, conduct a market study to estimate earnings potential, supervise construction of a building, and provide initial training to employees. On December 3, 2021, Sapphire Co. entered into a franchising agreement with EMERALD, INC. by the end of the year, SAPPHIRE CO. has completed about 25% of the initial services at a cost of P300,000 and it has ascertained that collection of the notes is reasonably assured. For 2021, SAPPHIRE CO. should recognized franchise revenue of:A. 5,000,000 C. 1,700,000B. 2,000,000
- 7. Maipao Corporation sells computer software to Mr. Bong. Mr. Bong shall pay P750,000 upfront fee in exchange for the following performance obligations: (1) equipment (2) initial training and (3) five years right over the computer software. The stand-alone selling price of the equipment is P380,000. The stand-alone selling price of the initial training is P280,000. The entity estimates the stand-alone selling price of the five year right over the computer software using the residual approach. On February 1, 20x1, Maipao receive the P150,000 cash and the balance payable in three annual payments beginning January 30, 20x2. Mr. Bong signs a 10% interest bearing for the balance. On August 1, Maipao has already transferred the equipment and conducted the initial training and the software license will commence on the same date. The entity determines that the performance obligations in the contract are distinct. The following shall be accounted as part of the consigned inventory of the…Headland Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2025, to expand its production capacity to meet customers' demand for its product. Headland issues an $640,000, 5-year, zero-interest-bearing note to Central Michigan for the new equipment when the prevailing market rate of interest for obligations of this nature is 7%. The company will pay off the note in five $128.000 installments due at the end of each year over the life of the note. T - Your answer is partially correct Prepare the journal entry at the date of purchase. (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Equipment Discount on Hobes Payable Notes Payable…The following problem requires present value information: Biotech sold a patent on a new blood analyzer to Pharma. The sales agreement which was signed on January 1, 2019 requires Pharma to pay Biotech $1 million immediately. In addition, Pharma is required to pay $700,000 each December 31 for 20 years starting with December 31, 2019. Pharma and Biotech judge that a 9 percent is an appropriate interest rate for this arrangement. (a) Compute the present value of the receivable on Biotech’s books on January 1, 2019 immediately after receiving the $1 million down payment. (b) Compute the present value of the receivable on Biotech’s books on December 31, 2019 Enter your answer(s) in the following format rounded off to the nearest dollar (c) Compute the present value of the receivable on Biotech’s books on December 31, 2020
- On March 1, 2024, Gold Examiner receives $139,000 from a local bank and promises to deliver 94 units of certified 1-ounce gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third- party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,410 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $90 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1. Required: 1. How many performance obligations are in this contract? 2. to 4. Prepare the journal entry Gold Examiner would record on March 1, March 30, and April 1. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 Prepare the journal entry Gold Examiner would record on March 1,…Three different plans were presented to the Ahbhalet Corporation for operating an identity-theft scanning system. Plan A involves renewable 1-year contracts with payments of $1.4 million at the beginning of each year. Plan B is a 2-year contract that requires four payments of $420,000 each, with the first one made now and the other three at 6-month intervals. Plan C is a 3- year contract that entails payment of $2.2 million now and the second payment of $0.5 million 2 years from now. Assuming that the company could renew any of the plans under the same payment conditions, determine which plan is best on the basis of a PW analysis at a MARR of 6% per year compounded semiannually. The present worth of plan A is $. the present worth of plan B is $ The best plan on the basis of the present worth analysis is [(Click to select) and the present worth of plan C is $On March 1, 2024, Gold Examiner receives $148,000 from a local bank and promises to deliver 100 units of certified 1-ounce gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink's, a third- party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,410 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $90 per unit. Brink's picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1. Required: 1. How many performance obligations are in this contract? 2. to 4. Prepare the journal entry Gold Examiner would record on March 1, March 30, and April 1. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 4 How many performance obligations are in this contract? Number of…