Name:_______________ Part I Open-ended question (10 points; 20% of exam) ID:____________ For Quick Start the first month in business has ended. In the last days of December 2005, they already received contributed capital of € 6,000 and they obtained a five-year bank loan of € 24,000 at an annual rate of interest of 10 percent. Interest has to be paid each year on October 31. On December 31, 2005 various store equipment was purchased at a total cost of € 12,000, paid in cash. It is expected that the equipment has to be replaced after five years.
What was Brady Brothers cash basis income? Cash basis income: $6,000 (cash received) - $5,000 (cash paid) = Answer: $1,000 Question 3: What was Brady Brothers accrual basis income? Accrual basis income: $12,000 (revenue earned) - $8,000 (expenses incurred) = Answer: $4,000 Question 4: Anderson Company’s balance sheet at the end of the year revealed the following information: Clients owe Anderson Company $35,300 for completed projects. Anderson Company owns office equipment totaling $95,500. Anderson Company owns $5,000 of material used on various client projects.
• begins when the firm uses its cash to purchase raw materials and ends when the firm collects cash payments on its credit sales. • shows how long the firm keeps its inventory before selling it. Click here to download STR 581 Week 4 Capstone 2 19. Ajax Corp. is expecting the following cash flows - $79,000, $112,000, $164,000, $84,000, and $242,000 – over the next five years. If the company’s opportunity cost is 15 percent, what is the present value of these cash flows?
REVIEW Problem: (Chapter 2) Bob Sample opened the Campus Laundromat on September 1, 2012. During the first month of operations, the following transactions occurred. Sept. 1 Bob invested $20,000 cash in the business. 2 The company paid $1,000 cash for store rent for September. 3 Purchased washers and dryers for $25,000, paying $10,000 in cash and signing a $15,000, 6-month, 12% note payable.
(10 points) |Score | | | 2. An online store that has been successfully growing on its initial angel investment and revenues wants to invest $5 million to expand the business. The bank is willing to lend the business this money at a 10 percent interest rate over an eight-year term. Calculate the monthly payment, and explain what the business must be able to do with this money in order for this to be a smart business decision. The monthly payment would be $53,084.34.
The business required £30,000 cash for working capital. The company gets a loan of £450,000 which was transfer into the business bank account in January as shown in appendix 6. The cash budget shows a balance of £3,918 in January and £16,335 February. The loan calculation is shown in appendix 8. This is expected to be paid back within 8 years by monthly paid instalments of £5.718.41 which was calculated on a 5.1% interest rate.
(TCOs 3, 4, 5, & 7) During the past two years, through extensive advertising and improved customer relations, Beech Corporation estimated that it had developed customer goodwill worth $100,000. For the current year, determine the amount of goodwill Beech Corporation may amortize. Question 6. (TCOs 3, 4, 5, & 7) Damien, not a dealer in real estate, sold real estate with a basis of $250,000 for $500,000 cash, a note for $250,000, and the buyer assumed Damien’s mortgage on the property of $125,000. During the year, the purchaser paid Damien $30,000 principal and $72,000 interest on the note and paid $6,000 principal and $18,000 interest on the mortgage he assumed.
Calculate the amount of employee taxes withheld and prepare the company's journal entry to accrue the January salaries expense and withholding of January taxes. Answer: Salaries Expense | 8,000 | | FICA–Social Security Taxes Payable ($8,000 x .062) | | 496 | FICA–Medicare Taxes Payable ($8,000 x .0145) | | 116 | Employees' Federal Income Taxes Payable ($8,000 x .15) | | 1,200 | Accrued Payroll Payable | | 6,188 | 11. On December 1, 2007 Gates Company borrowed $45,000 cash from FirstBank on a 90-day, 9% note payable. a. Prepare Gate's general journal entry to record the issuance of the note payable.
She will only take four years to complete her degree. Currently, tuition and housing costs at top private schools total $35,000 per year, which are paid at the beginning of each school year. These expenses are expected to increase at the rate of inflation which will run at 4% annually for the next 25 years. In each year through her 18th birthday, Mary’s parents will make a deposit into the college fund so
Question: : (TCO D) On December 31, 2010, Irey Co. has $2,000,000 of short-term notes payable due on February 14, 2011. On January 10, 2011, Irey arranged a line of credit with County Bank which allows Irey to borrow up to $1,700,000 at one percent above the prime rate for three years. On February 2, 2011, Irey borrowed $1,700,000 from County Bank and used $300,000 additional cash to liquidate $1,700,000 of the short-term notes payable. The amount of the short-term notes payable that should be reported as current liabilities on the December 31, 2010 balance sheet which is issued on March 5, 2011 is 9. Question: : (TCO D) Tender Foot Inc. is involved in litigation regarding a faulty product sold in a prior year.