+1-415-670-9189
info@expertsmind.com
Financial statement analysis and preparation
Course:- Financial Accounting
Reference No.:- EM13221




Assignment Help
Assignment Help >> Financial Accounting

TASK 1 :

Complete the following questions:

1. How much needs to be invested today if your goal is to have $100,000 five years from today? The return on the investment is expected to be 10% and will be compounded semi-annually. 

2. How much needs to be invested today if your goal is to be able to withdraw $5,000 for each of the next ten years beginning one year from today? The return on the investment is expected to be 12%. 

3. If $20,000 is invested for 10 years, at 6 percent interest, compounded annually, what is the value of the investment at the end of 10 years?

4. What is the value of the investment If $50,000 is invested initially, plus $5,000 is invested annually at the end of each of the next three years, at 12 percent interest, compounded annually?

5. Long Company purchased land by paying $10,000 cash on the purchase date and agreeing to pay $10,000 for each of the next ten years beginning one-year from the purchase date. Long's incremental borrowing rate is 10%. At what amount would the land be reported at on the balance sheet?

Task 2:

On March 1, 2010, Hall Corporation, issued $500,000 of 8%, five-year bonds at par. The bonds were dated March 1, 2010, and the first annual interest payment will be on February 28, 2011. The accounting period ends December 31. Assuming no adjusting entries have been made during the year.

Complete the journal entry grid for each of the following dates (round to the nearest dollar):

Accounts              March 1, 2010        December 31, 2010   February 28, 2011

                            Debit              Credit            Debit               Credit     Debit             Credit

Cash

Bonds payable

Interest payable

Interest expense

Task 3:

Newton Corporation issued its $1,000,000, 7%, ten-year bonds to the public on January 1, 2010. The bonds pay interest annually, beginning on December 31, 2010. Newton Corporation received $1,153,420 in cash at the issuance of the bonds. The market rate of interest when the bonds were issued was 5%. Newton Corporation has a December 31 year-end. Assume that no adjusting journal entries have been made during the year.

1. Compute the amount of the premium that Newton Corporation should amortize on December 31, 2010, assuming the "effective-interest" method is used.

2. Compute the amount of the premium that Newton Corporation should amortize on December 31, 2010, assuming the "straight-line" method is used.

3. Which method above do you believe is the better to use for amortizing a bond premium?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Financial Accounting) Materials
On April 8, 2013, a flood destroyed the warehouse of Stuco Distributing Co. From the waterlogged records of the company, management was able to determine that the firm's gross
Reviewing a CAFR Review the most recent CAFR of a state or local government in your area. Using that report, identify: The entity’s most significant source of revenues and mos
You are the benefits manager at a medium-sized corporation and the president of the company has requested your advice. She overheard an employee saying that the employer spend
For which situation(s) below would an organization be more likely to use a process costing system of rather than a job-order costing system? Powell’s Courier Service recorded
Weston Corporation is considering eliminating a department that has a contribution margin of $70,000 and $140,000 in fixed costs. Of the fixed costs, $100,000 cannot be avoide
Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during calendar yea
Jones Company had financial basis Pretax income of 300000, book basis taxable income of 340,000 and tax basis taxable income of 320,000. The Companys Federal Federal and State
The City of Amarillo is authorized to issue $8,000,000, 3 percent regular serial bonds in 2017 for the construction a new exit off the interstate highway within city limits. P