On January 1 of this year, Skamania Company completed the following transactions (assume a 8% annual interest rate): (FV of $1, PV $1, FVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. a. Bought a delivery truck and agreed to pay $60,200 at the end of three years. b. Rented an office building and was given the option of paying $10,200 at the end of each of the next three years or paying $28,200 immediately. c. Established a savings account by depositing a single amount that will increase to $90,400 at the end of seven years. d. Decided to deposit a single sum in the bank that will provide 8 equal annual year-end payments of $40,200 to a retired employee (payments starting December 31 of this year). Required: a. What is the cost of the truck that should be recorded at the time of purchase? b. Which option for the office building results in the lowest present value? c. What single amount must be deposited in this account on January 1 of this year? d. What single sum must be deposited in the bank on January 1 of this year? Complete this question by entering your answers in the tabs below.

On January 1 of this year, Skamania Company completed the following transactions (assume a 8% annual interest rate): (FV of $1, PV $1, FVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. a. Bought a delivery truck and agreed to pay $60,200 at the end of three years. b. Rented an office building and was given the option of paying $10,200 at the end of each of the next three years or paying $28,200 immediately. c. Established a savings account by depositing a single amount that will increase to $90,400 at the end of seven years. d. Decided to deposit a single sum in the bank that will provide 8 equal annual year-end payments of $40,200 to a retired employee (payments starting December 31 of this year). Required: a. What is the cost of the truck that should be recorded at the time of purchase? b. Which option for the office building results in the lowest present value? c. What single amount must be deposited in this account on January 1 of this year? d. What single sum must be deposited in the bank on January 1 of this year? Complete this question by entering your answers in the tabs below.

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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Harper Co. funds the acquisition of equipment on January 1, year 8 by issuing a $15,000 non-interest-bearing note payable. Beginning on December 31, year 8, the debt will be paid off in ten equal yearly payments. The market rate of interest for this sort of note is 5%. Given the facts below, how much should Harper Co. report the equipment on its December 31, year 8 balance sheet? For ten periods, the present value of $1 at 5% is 0.61391. The present value of a $1 regular annuity at 5% for ten periods is 7.72173. The current value of a $1 annuity payable in ten periods at 5% is 8.10782 8.10782
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A company purchased new equipment for $31,000 with a two-year installment note requiring 5% interest. The required monthly payment is $1,360. For the first month’s payment, what is the amount to record for interest expense? a. $120.b. $129.c. $68.d. $155.
acobs Company borrowed $10,000 on a one-year, 8 percent note payable from the local bank onApril 1. Interest was paid quarterly, and the note was repaid one year from the time the money was borrowed. Calculate the amount of cash payments Jacobs was required to make in each of the two calendar years that were affected by the note payable.
A property in Waterford was purchased with a down payment of $3525 and payments of $2025 at the beginning of every 6 months for 9 years. interest is 6% compounded monthly. what were the purchase price of the property and the cost of financing?
On January 1, year 8 Harper Co. finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Co. report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782
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On January 1, year 8 Harper Company finances the purchase of equipment by issuing a $15,000 non-interest-bearing note payable. The note will be paid off in 10 equal annual installments beginning on December 31, year 8. The market rate of interest for notes of this type is 5%. Considering the information below, at what amount should Harper Company report the equipment on its balance sheet dated December 31, year 8? The present value of $1 at 5% for 10 periods 0.61391 The present value of an ordinary annuity of $1 at 5% for 10 periods 7.72173 The present value of an annuity due of $1 at 5% for 10 periods is 8.10782 8.10782 Multiple Choice $9,209 $11,583 $12,162 $15,000
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Halep Inc. borrowed $36,000 from Davis Bank and signed a 4-year note payable stating the interest rate was 4% compounded annually. Halep Inc. will make payments of $9,917.64 at the end of each year. Prepare an amortization table showing the principal and interest in each payment. Round your answers to two decimal places. Year BeginningBalance Payment Interest To Principal EndingBalance 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 2 fill in the blank 6 fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 3 fill in the blank 11 fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 4 fill in the blank 16 fill in the blank 17 fill in the blank 18 fill in the blank 19 fill in the blank 20
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