Answer:
Both requirements are solved below
Explanation:
An amortization table can be made as follows
DATA
Lease term = 7years
annual lease payments = $350,0000
Present value of the leases payment = $1,704,000
Implicit interest rate = 10%
Requirement A Amortization table for 2011 and 2012
Date Annual payment Effective decreased Balance
interest liability $1,704,000
12/31/11 $350,000 $170,400 $179,600 $1524,400
12/31/12 $350,000 $152,440 $197,560 $1,326,840
Requirement B journal entries for 2011
January 1
Entry
DEBIT CREDIT
Leased machinery $1,704,000
Lease liability $1,704,000
December 31
Entry
DEBIT CREDIT
Interest expense $170,400
Lease liability $179,600
Cash $350,000
December 31
Entry
DEBIT CREDIT
Depreciation expense(w) $426,000
Accumulated depreciation $426,000
Working
Sum of the years = (7+6+5+4+3+2+1) = 28
Cost = $1,704,000
Residual value = $0
Estimated life = 7years
Depreciation expense = $1,704,000 x 7/28
Depreciation expense = $426,000
The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n)
Answer:
Operating Activity
Explanation:
The Indirect method, reconciles the Operating Profit to the Operating Cash Flow by adjusting the following items (1) Non Cash flow items previously added or deducted from Operating Profit and (2) Changes in Working Capital items.
Amortization of bond premium is an item of non-cash flow that was previously deducted from Operating Profit and needs to be added back.
A project has estimated annual net cash flows of $56,600. It is estimated to cost $339,600.
Required:
Determine the cash payback period.
Answer:
It will take exactly 6 full years to cover for the initial investment.
Explanation:
Giving the following information:
Cash flow= $56,600
Initial investment= 339,600
The payback period is the time required for the cash flow to cover the initial investment:
Year 1= 56,600 - 339,600= -283,000
Year 2= 56,600 - 283,000= -226,400
Year 3= 56,600 - 226,400= -169,800
Year 4= 56,600 - 169,800= -113,200
Year 5= 56,600 - 113,200= -56,600
Year 6= 56,600 - 56,600= 0
It will take exactly 6 full years to cover for the initial investment.
Solve the consumer’s problem for John’s optimal demand for Germ-X and Purell. (You should find actual numbers representing the quantity of Germ-X chosen and the quantity of
Answer:
Hello your question is incomplete below is the missing part and the needed diagram
suppose John is shopping and has $20 to spend on hand sanitizer. He can go with Germ-X (G) at $1 per fluid ounce (pG=1), or he can purchase purell (P) at $1.25 per fluid ounce (Pp=1.25). His utility function for the two different hand sanitizers is as follows:
U = G +1.1P
where G and P are measured in fluid ounces.
Solve the consumer’s problem for John’s optimal demand for Germ-X and Purell. (You should find actual numbers representing the quantity of Germ-X chosen and the quantity of purell chosen
ANSWER: The solution = (Germ-x,Purell ) = (20,0).
Explanation:
The consumers problem for John's optimal demand for Germ-x and Purell as seen in the diagram can solved by John going maximizing his utility given the constraint of the budget,
that means that John will purchase/spend the constrained budget of ($20) on Germ-x since the unit price of Germ X is at $1 while Purell's unit price is at $1.25 per fluid ounce
