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
Outdoors R Us owns several membership-based campground resorts throughout the Southwest. The company sells campground sites to new members, usually during a get-acquainted visit an

What type of activity could a company engage in to improve their cash flows in their Cash Flows Statement? Is this ethical? Could borrowing money make the cash from operations be

Most of David's clients are local. However, a few of his clients require out of town travel. He incurred $2,500 of airfare, $1,570 in lodging and $1,313 in meals relating to the bu


Effects of differential cost analysis in decision making

DEMERITS OF BREAK EVEN POINT 1. It pays no attention to considerations like effect of government policy changes, changes in the marketing environment etc 2. Fixed cost, enti

Economic Order Quality or EOQ Define the model and the three methods of computing the EOQ. 1. Assumptions of the model. Illustration The given information was extra

behavioral aspect of standard costing

what are the classifications of labour costs? what is employee psyche?

You are considering starting a walk-in-clinic.  Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400