Interest earned on down payment, Cost Accounting

You sell a machine for $600,000. You allow the client to pay 1/3 at the time of the sale and 1/3 at the end of year one and 1/3 at the end of year two. The company earns 10% on assets. What value will you record the sale at?

Sales Price:

 $  600,000.00

Down Payment:

 $  200,000.00

Outstanding Balance at Start of Year 1:

 $  400,000.00

Outstanding Balance at Start of Year 2:

 $  200,000.00

 

0 interest earned Down Payment


10% Interest Earned on the remaining $400,000 for 1 Year

$40,000

10% Interest Earned on the remaining $200,000 for 1 Year

$20,000

Posted Date: 3/30/2013 5:23:22 AM | Location : United States







Related Discussions:- Interest earned on down payment, Assignment Help, Ask Question on Interest earned on down payment, Get Answer, Expert's Help, Interest earned on down payment Discussions

Write discussion on Interest earned on down payment
Your posts are moderated
Related Questions

Show the effect of an increase in each of the items listed below on the FCFF and FCFE. Suppose a $100 increase in every case and a 40 percent tax rate a.    Net income b.    Cas

Introduction of Internal Rate of Return The traditional internal rate of return (IRR) method of project selection has been shown to be inferior to the NPV method due to vario

In this exercise you will familiarize yourself with index models, beta and CAPM estimation. Download the spreadsheet data_question3.xlsx from Sakai and use the data contained there

METHODS OF COSTING : 1. Job costing :  Job costing is the essential costing technique appropriate to those industries somewhere the work consist of separate contracts, or batch

First of all, look at the balance sheet and income statement as a whole and spot the problem with it. Answer all questions given in the question + dig into each element of the bala

The Cutting Department of the Rock Island Custom Cabinetry Corporation (a process costing production) had no work in process at the beginning of the period, 12,000 units were compl


CVP for Multiple Products What number of businesses sells only one manufactured goods? The reality is that firms usually give us the diverse product line, and the individual pr

William Potter is a plumber currently operating as a Sole Trader in Levin. William has approached you, a tax accountant, for your advice on certain tax matters. William's brothe