Answer:
A. Dr Land $220,000.00
Dr Discount on Notes Payable $126,174.00
Cr Notes Payable $346,174.00
Dr Cash $287,796.06
Dr Discount on Note Payable $122,203.94
Cr Note Payable $410,000
B. December 31, 2017
Dr Interest expense $26,400
Cr Discount on Notes Payable $26,400
December 31, 2017
Dr Interest expense $34,535.5
Cr Cash $24,600
Cr Discount on Notes Payable $9,935.5
Explanation:
(a) Preparation to Record the two journal entries that should be recorded by Sheffield Company for the two purchases on January 1, 2020.
Dr Land $220,000.00
Dr Discount on Notes Payable $126,174.00
($346,174.00-$220,000.00)
Cr Notes Payable $346,174.00
Dr Cash $287,796.06
Dr Discount on Note Payable $122,203.94
Cr Note Payable $410,000
Calculation for the PV of note using Financial calculator
N=8
I/Y% = 12%
Interest payment – $410,000 x .06 = $24,600
FV = $410,000
PV of note = $287,796.06
Calculation for Discount on note
Discount on note = $410,000 –$287,796.06
Discount on note= $122,203.94
(b) Preparation of the journal entry to Record the interest at the end of the first year on both notes using the effective-interest method.
December 31, 2017
Dr Interest expense $26,400
($220,000 x .12)
Cr Discount on Notes Payable $26,400
December 31, 2017
Dr Interest expense $34,535.5
($287,796.06*.12)
Cr Cash $24,600
($410,000 x .06)
Cr Discount on Notes Payable $9,935.5
($34,535.5-$24,600)
As an investor, what is the risk involved when investing in companies on the stock
exchange?
a. Investors can lose their existing shares if the value of the stock does not
increase within 90 days of purchase
b. Once they purchase a share, investors cannot sell them at a higher price
The price of stocks can decrease; for example, when the company
receives bad press
d. Investors are only at risk if the purchase a share when the stock price has
fallen
C.
Answer:d
Explanation:
The investor are only at risk if the purchase of a share when the stoc price has fallen
Consider two neighboring island countries called Arcadia and Felicidad. They each have 4 million labor hours available per week that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.
Jeans Corn
Country (Pairs per hour of labor) (Bushels per hour of labor)
Arcadia 8 16
Felicidad 5 20
Initially, suppose Arcadia uses 1 million hours of labor per week to produce jeans and 3 million hours per week to produce corn, while Felicidad uses 3 million hours of labor per week to produce jeans and 1 million hours per week to produce corn. Consequently, Arcadia produces 8 million pairs of jeans and 48 million bushels of corn, and Felicidad produces 15 million pairs of jeans and 20 million bushels of corn. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn it produces.
Arcadia's opportunity cost of producing 1 pair of jeans is____of corn, and Felicidad's opportunity cost of producing 1 pair of jeans is____of corn. Therefore,____has a comparative advantage in the production of jeans, and____has a comparative advantage in the production of corn.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce ___ million pairs per week, and the country that produces corn will produce ____ million bushels per week.
When the two countries did not specialize, the total production of jeans was 23 million pairs per week, and the total production of corn was 68 million bushels per week. Because of specialization, the total production of jeans has increased by____million pairs per week, and the total production of corn has increased by____million bushels per week.
Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade.
Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked “Increase in Consumption”).
Arcadia Felicidad
Jeans Corn Jeans Corn
(millions of pairs) (millions of bushels) (millions of pairs) (millions of bushels)
Without Trade
Production 8 48 15 20
Consumption 8 48 15 20
With Trade
Production
Trade action
Consumption
Gains from trade
Increase in consumption
Answer:
Arcadia's opportunity cost of producing 1 pair of jeans is 2 bushels of corn, and Felicidad's opportunity cost of producing 1 pair of jeans is 4 bushels of corn. Therefore, Arcadia has a comparative advantage in the production of jeans, and Felicidad has a comparative advantage in the production of corn.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce 32 million pairs per week, and the country that produces corn will produce 80 million bushels per week.
When the two countries did not specialize, the total production of jeans was 23 million pairs per week, and the total production of corn was 68 million bushels per week. Because of specialization, the total production of jeans has increased by 9 million pairs per week, and the total production of corn has increased by 12 million bushels per week.
Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade.
Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked “Increase in Consumption”).
Arcadia Felicidad
Jeans Corn Jeans Corn
Without Trade
Production 8 48 15 20
Consumption 8 48 15 20
With Trade
Production 32 0 0 80
Trade action 15 48 15 48
Consumption 17 48 15 32
Gains from trade
Increase in 9 12
consumption
Your daughter is currently 10 years old. You anticipate that she will be going to college in 8 years. You would to have $136,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 3% per year, how much money do you need to put into the account today to ensure that you will have $136,000 in 8 years
Answer:
$107,359.66
Explanation:
We are to calculate the present value of $136,000
The formula for calculating present value is :
The formula for calculating future value:
P = FV / (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
$136,000 / (1.03)^8 = $107,359.66