Loose Leaf for Financial Accounting: Information for Decisions
Loose Leaf for Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158762
Author: John J Wild
Publisher: McGraw-Hill Education
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Suppose a College has the option of either buying payroll software off-the-shell at $50,000 or employing a programmer for six months at a salary of $5000 to develop the software. Perform cost-benefit analysis for the two options. You can make suitable assumptions regarding any factor that has not been mentioned in this problem statement.
Use the information for the next three (3) questions. Seva Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date.During 2020, the customer earned 60,000 points. Management expects that 100% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price.On December 31, 2020, 28,800 points have been redeemed in exchange for purchases.In 2021, the management revised expectations and now expects 90% of the points to be redeemed. 9,000 points were redeemed during the year.How much of the sales should be allocated to the award points? How much should be recognized as revenue for 2020? How much should be recognized as revenue for 2021?
Solve each of the following questions using both pricing formulas and Excel.  5. You are managing a small company and need to buy some equipment for your product line. Kangaroo Manufacturing is offering free credit on a $20,000 piece of equipment. You pay down $2,000 and then $600 a month for the next 30 months. Turtle Machines does not offer free credit but will give you $2,000 off the list price. If the rate of interest is 10% (APR) a year, which company is offering a better deal?
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