Three Accounting questions
Account_tutorOn October 1, 20X4, Farmer Engineering Services purchased a new laser surveying instrument. Farmer paid $5,000 down and executed the following promissory note: | |||
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| Promissory note |
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For value received, the undersigned promises to pay to the order of Laser Equipment Company | |||
| the sum of: *******Twenty-Thousand and no/100 Dollars******* ($20,000) |
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| Along with annual interest of 10% on any unpaid balance. This note shall mature and be payable, along with accrued interest, on September 30, 2014. |
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| October 1, 2013 J.D. Farmer Farmer Engineering |
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| Issue Date Signature |
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(a) | Prepare the appropriate journal entry to record the purchase on October 1, 2013. | ||
(b) | Prepare the appropriate journal entry to record the year-end interest accrual on December 31, 2013. | ||
(c) | Prepare the appropriate journal entry to record the payment of the note and accrued interest on September 30, 2014. | ||
Examine the following items and prepare the current liabilities section of the Balance sheet for Annapolis Corporation as of December 31, 2007 |
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The beginning of year accounts payable was $100,000. Purchases on trade accounts during the year were $650,000, and payments on account were $610,000. |
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The company incurs substantial costs for electricity to run its servers and air conditioning systems. As of December 31, 2007, it is estimated that $55,000 of electricity has been used, although the monthly billing for December has not yet been received. |
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Server Planet sells web hosting plans for as low as $25 per month. However, it requires its customers to prepay in 6-month increments. As of the end of the year, $375,000 had been collected for 2008 web hosting plans. |
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Web hosting services are subject to sales taxes, and Server Planet collected $65,000 during the year. All of these amounts have been remitted to taxing authorities, with the exception of $5,000 that is due to be paid in January, 2008. |
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The company has total bank loans of $1,500,000. This debt bears interest at 6%, payable monthly. As of December 31, 2007, all interest had been paid, with the exception of accrued interest for the last half of December. |
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The company's bank loans ($1,500,000) are all due on June 30, 2008. However, Server Planet has a firm lending agreement with the bank to renew and extend $1,000,000 of this amount on a 5-year basis. The company intends to exercise this renewal option, but is not yet sure about the final disposition of the remainder. |
Present and Future Value
(a) What is the present value of $10,000 to be received in six years at an 8% discount rate?
(b) If you put $1,000 in a savings account at the beginning of every year for five years, what is the account balance at the end of five years if it earns 4% interest?
(c) How much would you have if you waited until the end of each year to deposit your $1,000?
11 years ago
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three_accounting_questions_30_june.xlsx
