You want to buy a house that costs $140,000. You have $14,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $126,000. However, the realtor persuades the seller to take a $126,000 mortgage (called a seller take-back mortgage) at a rate of 5%, provided the loan is paid off in full in 3 years. You expect to inherit $140,000 in 3 years, but right now all you have is $14,000, and you can afford to make payments of no more than $22,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.)

Required:
a. If the loan was amortized over 3 years, how large would each annual payment be? Could you afford those payments?
b. If the loan was amortized over 30 years, what would each payment be? Could you afford those payments?
c. To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means that at the end of the third year, you would have to make the regular payment plus the remaining balance on the loan. What would the loan balance be at the end of Year 3, and what would the balloon payment be?

Answer:

Kindly check explanation

Explanation:

Given the following :

Cost of house = $140,000

Down payment = $14000

Take back mortgage = 126000 = PV

Rate (r) = 5%

Yearly payment one can afford = 22000

a. If the loan was amortized over 3 years, how large would each annual payment be? Could you afford those payments?

Number of period = 3

Using the relation:

PMT = r(PV) / 1 - (1 + r)^-n

PMT = 0.05(126000) / 1 - 1.05^-3

PMT = 6300 / (1-0.8638375)

PMT = 46,268.23

He won't be able to afford it, as the monthly payment is larger than the affordable amount of $22000

b. If the loan was amortized over 30 years, what would each payment be? Could you afford those payments?

PMT = r(PV) / 1 - (1 + r)^-n

PMT = 0.05(126000) / 1 - 1.05^-30

PMT = 6300 / (1-0.2313774)

PMT = 8196.48

He would be able to afford it, as the monthly payment is lower than the affordable amount of $22000

c. To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means that at the end of the third year, you would have to make the regular payment plus the remaining balance on the loan. What would the loan balance be at the end of Year 3, and what would the balloon payment be?

Present value of remaining balance after the 3rd year:

Present Value (PV) = PMT[(1 - (1 + r)^-n) / r]

Where

PMT = periodic payment = 8196.48

r = Interest rate = 5% = 0.05

n = number of periods = 30 - 3 = 27

PV = 8196.48[(1 - (1 + 0.05)^-27) / 0.05]

PV = 8196.48[(1 - (1. 05)^-27) / 0.05]

PV = 8196.48[0.7321516 / 0.05]

PV = 120,021.32

Balloon payment :

120,021.32 + 8196.48 = 128,217.80

a. The annual payment if the Mortgage was amortized over three years is $45,315.96 (Interest + Principal)

The Mortgage payments are not affordable because his affordability funds are limited to $22,000 annually.

Annual Amortization Schedule  

 Beginning Balance      Interest             Principal        Ending Balance

1             $126,000.00        $5,393.36        $39,922.60        $86,077.35

2              $86,077.35        $3,350.86          $41,965.10          $44,112.18

3                $44,112.18          $1,203.81           $44,112.15                 $0.00

b.  The annual payment if the Mortgage was amortized over thirty years is $8,116.80 (Interest + Principal)

The Mortgage payments are now affordable with his affordability amount of $22,000 per year.

Annual Amortization Schedule for the first three years:  

 Beginning Balance      Interest           Principal     Ending Balance

1            $126,000.00        $6,257.79        $1,859.01         $124,141.04

2             $124,141.04         $6,162.68        $1,954.12        $122,186.97

3            $122,186.97         $6,062.70       $2,054.10        $120,132.93

c. Payments made by the end of the third year were $5,867.07 with a balance of $120,132.93.

Data and Calculations:

Cost of house = $140,000

Down payment = $14,000

Mortgage value = $126,000($140,000 - $14,000)

Mortgage interest rate = 5%

Affordable annual payments = $22,000

Thus, the balloon payment is always based on an agreed percentage of the loan, which is not provided here.

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The bookkeeper for Ivanhoe Company asks you to prepare the following accrual adjusting entries at December 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
a. Interest on notes payable of $270 is accrued.
b. Services performed but unbilled totals $1,930.
c. Salaries of $700 earned by employees have not been recorded.

The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31.

MOTO HOTEL Trial Balance May 31, 2017

Debit Credit
Cash $2,403
Supplies 2,600
Prepaid Insurance 1,800
Land 14,903
Buildings 70,000
Equipment 16,800
Accounts Payable $4,603
Unearned Rent Revenue 3,300
Mortgage Payable 36,000
Common Stock 59,903
Rent Revenue 9,000
Salaries and Wages Expense 3,000
Utilities Expense 800
Advertising Expense 500
$112,806 $112,806

Other data:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1,160 of unused supplies on May 31.
3. (a) Annual depreciation is $3,480 on the building. (b) Annual depreciation is $2,880 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,580 has been earned.
6. Salaries of $760 are accrued and unpaid at May 31.

Required:
Journalize the adjusting entries on May 31.

Tamarisk Games Inc. adjusts its accounts annually. The following information is available for the year ended December 31, 2022.
1. Purchased a 1-year insurance policy on June 1 for $1,980 cash.
2. Paid $6,760 on August 31 for 5 months’ rent in advance.
3. On September 4, received $3,780 cash in advance from a corporation to sponsor a game each month for a total of 9 months for the most improved students at a local school.
4. Signed a contract for cleaning services starting December 1 for $1,040 per month. Paid for the first 2 months on November 30. (Hint: Use the account Prepaid Cleaning to record prepayments.)
5. On December 5, received $1,560 in advance from a gaming club. Determined that on December 31, $495 of these games had not yet been played.
For each of the above transactions, prepare the adjusting journal entry that is required on December 31.

Interpreting the Accounts receivable Footnote Hewlett-Packard Company (HPQ) reports the following in its 2007 10-K report.

October 31 (in millions) 2007 2006
Accounts receivable, net $13,420 $10,873

HPQ footnotes to its 10-K provide the following additional information relating to its allowance for doubtful accounts.

For the fiscal years ended October 31 (in millions)

2007 2006 2005
Allowance for doubtful accounts-accounts receivable
Balance, beginning of period $220 $227 $286
Increase in allowance from acquisition 245 3 4
Addition of bad debts provision 32 37 17
Deductions, net of recoveries (29) (48) (76)
Balance, end of period $226 $220 $227

Required:
a. What is the gross amount of accounts receivables for HPQ in fiscal 2007 and 2006?
b. What is the percentage of the allowance for doubtful accounts to gross accounts receivable for 2007 and 2006?
c. What amount of bad debts expense did HPQ report each year 2007 through 2006? What amount was actually written off?

Below are cash transactions for Goldman Incorporated, which provides consulting services related to mining of precious metals
a. Cash used for purchase of office supplies, $1,650
b. Cash provided from consulting to customers, $43,100
c. Cash used for purchase of mining equipment, $68,000.
d. Cash provided from long-term borrowing, $55,000
e. Cash used for payment of employee salaries, $23,500.
f. Cash used for payment of office rent, $11,500
g. Cash provided from sale of equipment purchased in c. above, $22,000
h. Cash used to repay a portion of the long-term borrowing in d. above, $37,500
i. Cash used to pay office utilities, $3,800
j. Purchase of company vehicle, paying $9,500 cash and borrowing $14,500
Required:
Calculate cash flows from investing activities. (List cash outflows as negative amounts.)

The December 31, 2015, balance sheet of Schism, Inc., showed long-term debt of $1,405,000, $141,000 in the common stock account, and $2,660,000 in the additional paid-in surplus account. The December 31, 2016, balance sheet showed long-term debt of $1,590,000, $151,000 in the common stock account, and $2,960,000 in the additional paid-in surplus account. The 2016 income statement showed an interest expense of $94,500 and the company paid out $146,000 in cash dividends during 2016. The firm’s net capital spending for 2016 was $970,000, and the firm reduced its net working capital investment by $126,000.
What was the firm's 2016 operating cash flow, or OCF? (A negative answer should be indicated by a minus sign. Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

marketing costs include what? please be precise
30 POINTS

Each of these is a key element of goal setting:
specific
intelligent
time-bound
measurable

$370,000, at 9% annual interest, from Interest is paid when the loan matures one year from the issue date. What is the adjusting entry for accruing interest that

NYJ, Inc. borrowed $800,000 on June 1, 2020, and signed a nine-month note bearing interest at 5%. Principal and interest are payable in full at maturity. In connection with this note, NYJ, Inc. should record interest expense in 2021 in the amount of:

Long before a single vote is cast, candidates are hard at work weighing the costs and benefits of running for office. As a part of this calculus, a strong candidate will spend time crafting a winning strategy for each stage of the contemporary campaign process In the following dialogue, a candidate is considering making a run for office in Texas. She is meeting with a political consultant to discuss her chances in the upcoming election. Use the dropdown menus to complete their conversation
CANDIDATE: Thank you for coming to my office today to discuss my viability as a candidate in the upcoming election.
CONSULTANT: You're welcome. I have conducted some research with the help of my staff on your chances, and we feel that if you choose your issues carefully, mobilize groups properly, and advertise persuasively, you could win
CANDIDATE: By "advertise persuasively," are you referring to 1. that I'm ready to sling mud just yet.
a) Character
b) Retail
c) Negative
CONSULTANT: I agree. It's best to get through the primary season without running attack ads Remember, because this is 2. and any registered voter may participate. The best-case scenario is that you'll win a clear majority of support. Options for 2. primary, voters don't have to declare their party identification,
a) A closed
b) An open
c) Non-partisan
CANDIDATE: Absolutely. I want to have a decisive victory and avoid 3. possible. In your opinion, what is the best way to accomplish this?
a) A recall
b) A runoff
c) An initiative
CONSULTANT: Name recognition is essential. Retail politics is still relevant, as is a good field organization. Our main focus, however, needs to be on the fundraising that will make it all possible. Without a lot of money in the bank, you will quickly be written off as unelectable because Texas campaigns are often quite.
a) Lopsided
b) Expensive
c) Inexpensive

The cash account of Aguilar Co. showed a ledger balance of $3,969.85 on June 30, 2020. The bank statement as of that date showed a balance of $4,150. Upon comparing the statement with the cash records, the following facts were determined.

1. There were bank service charges for June of $25.
2. A bank memo stated that Bao Dai’s note for $1,200 and interest of $36 had been collected on June 29, and the bank had made a charge of $5.5 on the collection. (No entry had been made on Aguilar’s books when Bao Dai’s note was sent to the bank for collection.)
3. Receipts for June 30 for $3,390 were not deposited until July 2.
4. Checks outstanding on June 30 totaled $2,136.05.
5. The bank had charged the Aguilar Co.’s account for a customer’s uncollectible check amounting to $253.2 on June 29.
6. A customer’s check for $90 (as payment on the customer’s Accounts Receivable) had been entered as $60 in the cash receipts journal by Aguilar on June 15.
7. Check no. 742 in the amount of $491 had been entered in the cash journal as $419, and check no. 747 in the amount of $58.2 had been entered as $582. Both checks had been issued to pay for purchases and were payments on Aguilar’s Accounts Payable.

Required:
a. Prepare a bank reconciliation dated June 30, 2020, proceeding to a correct cash balance.
b. Prepare any entries necessary to make the books correct and complete.

Jeremy Pruitt Ltd is considering the replacement of a delivery truck. The current truck could last for 3 more years. Operating costs are 5000 per year. We are currently depreciating it at 4000 per year. We could sell it at the end of the 3 years for 2000 with a book value of zero. If we purchase the new truck for 32000, we could use three year MACRS. We could sell the old truck now for 7000. Operating costs would drop to 1000 per year. We can sell the new truck for 15000 at the end of the 3rd year. Tax rate is 40%, WACC is 10%. Should we replace the truck?

The Pet Store experienced the following events for the Year 1 accounting period:________.
1. Acquired $60,000 cash from the issue of common stock.
2. Purchased $65,000 of inventory on account.
3. Received goods purchased in Event 2 FOB shipping point; freight cost of $900 paid in cash.
4. Sold inventory on account that cost $38,000 for $71,000.
5. Freight cost on the goods sold in Event 4 was $620. The goods were shipped FOB destination. Cash was paid for the freight cost.
6. Customer in Event 4 returned $4,200 worth of goods that had a cost of $2,150.
7. Collected $58,300 cash from accounts receivable.
8. Paid $59,200 cash on accounts payable.
9. Paid $2,600 for advertising expense.
1. Paid $3,100 cash for insurance expense.
Required:
a. Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction
b. Record the above events in a horizontal statement model. In the Cash Flow column, use OA to designate operating activity, IA for NA. investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The beginning balances have been recorded as an example.
Complete this question by entering your answers in the tabs below.
Required A Required B
Which of these events affect period (selling and administrative) costs? Which result in product costs? If neither, label the transaction NA.
Transaction Cost
1
2
3
4
5
6
7
8
9
10

You hit the lottery! You get offered $10 million now or $1 million a year for 13 years. Assume a 3 percent interest rate. Which would you choose and why

Privott, Inc., manufactures and sells two products: Product Z9 and Product N0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
Estimated Expected Activity
Activity Overhead
Measures Cost Product Z9 Product N0 Total
Labor-related DLHs $328,018 6,800 3,400 10,200
Product testing tests 47,747 600 700 1,300
Order size MHs 473,108 4,400 4,700 9,100
$848,873
The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:______.
a. $28.88 per DLH.
b. $48.81 per DLH.
c. $53.94 per DLH.
d. $431.44 per DLH.

A client agrees to pay a contractor $15,000 down towards a $45,000 job.
When his accountant is journalizing the transaction, how much should be
posted as accounts receivable?
A. $15,000
B. $0
O C. $45,000
D. $30,000

g Jefferson & Sons purchase $5,000 of merchandise from the Claremont Company with terms of 3/10, n/30. How much discount is Jefferson & Sons entitled to take if it pays within the allowed discount period of 10 days

Fethe's Funny Hats is considering selling trademarked, orange-haired curly wigs for University of Tennessee football games. The purchase cost for a 2-year franchise to sell the wigs is $20,000. If demand is good (40% probability), then the net cash flows will be $26,000 per year for 2 years. If demand is bad (60% probability), then the net cash flows will be $3,000 per year for 2 years. Fethe's cost of capital is 13%. Do not round intermediate calculations.

Required:
a. What is the expected NPV of the project?
b. if Fethe makes the investment today, then it will have the option to renew the franchise fee for 2 more years at the end of Year 2 for an additional payment of $20,000.

When an organization tries to influence the adaptation of individuals, the process of _____ is occurring. Group of answer choices encounter socialization individualization metamorphosis

Countess Corp. is expected to pay an annual dividend of $4.39 on its common stock in one year. The current stock price is $92 per share. The company announced that it will increase its dividend by 3.55% annually. What is the company's cost of equity

Which account is an example of a contra-expense account? A. purchases B. purchase returns C. sales D. sales returns

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,800 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $662,560 in total. The ending work in process inventory in January consisted of 4,000 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows:
Materials Labor Overhead
Cost per equivalent unit $12.70 $4.00 $6.60
Required:1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.4. Prepare a cost reconciliation for January.

What do successful entrepreneurs have in common?

We would like to invest $10,000 into shares of companies XX and YY.

Shares of XX cost $20 per share. The market analysis shows that their expected return is $1 per share with a standard deviation of $0.5.
Shares of YY cost $50 per share, with an expected return of $2.50 and a standard deviation of $1 per share.

Returns from the two companies are independent. In order to maximize the expected return and minimize the risk (standard deviation or variance), is it better to invest

a. All $10,000 into XX
b. All $10,000 into YY
c. $5,000 into each company

Firms face competing pressures in the marketplace-how to achieve lower costs through proven approaches to production, while looking at how to maximize their effectiveness in local markets. A firm's choice of strategy must reflect these pressures, and the firm knows that the dynamics of competition may require changes in strategy. Pressures for local responsiveness mean that a firm may not be able to realize the full benefits from economies of scale, learning effects, and location economies. Customization of products brings benefits, but it also limits the firm's ability to realize significant scale economies and location economies. Companies generally choose from four main strategic postures: a global standardization strategy, a localization strategy, a transnational strategy, or an international strategy. The appropriateness of each strategy varies given the competitive realities and the firm's core competences.
Read the case below and answer the questions that follow.
Your firm has been a leader in several lines of fast-moving consumer goods. The firm has been following a localization strategy. Your products have been distributed in a number of foreign markets and regions, and they are distinct enough in local markets to respond to national tastes and preferences. Competition, however, has become more intense, with many competitors using lower cost structures to undercut your prices and still satisfy your customers.
The firm must decide what kind of strategy it needs to follow to meet the demands of the local markets as well as the increased competitive pressures on cost.
a. leverage skills and products associated with a firm's core competencies from one country to another.
b. monitor and adapt to changing customer tastes in a large number of foreign markets.
c. compete effectively in more than one international market.

Brews 4 U is a local chain of coffee shops. Managers are interested in the costs of the stores and believe that the costs can be explained in large part by the number of customers patronizing the stores. Monthly data regarding customer visits and costs for the preceding year for one of the stores have been entered into the regression analysis.

Average monthly customer-visits 1,462
Average monthly total costs $4,629
Regression results: Intercept $1,496
b coefficient $2.08
R2 0.86814

Required:
a. In a regression equation expressed as y= a + bx, how is the letter b best described?
b. How is the letter y in the regression equation best described?
c. How is the letter x in the regression equation best described?
d. Based on the data derived from the regression analysis, what are the estimated costs for 370 customer-visits in a month?
e. What is the percent of the total variance that can be explained by the regression equation?

The following transactions occur for the Wolfpack Shoe Company during the month of June:
Provide services to customers for $30,000 and receive cash.
Purchase office supplies on account for $20,000.
Pay $7,000 in salaries to employees for work performed during the month.
1. Analyze each transaction.
2. Record the transaction.
3. Post the transaction to T-accounts. Assume the opening balance in each of the accounts is zero.

At the beginning of 2020, Pronghorn Company acquired a mine for $1,732,800. Of this amount, $112,000 was ascribed to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists have indicated that approximately 11,600,000 units of ore appear to be in the mine. Pronghorn incurred $190,400 of development costs associated with this mine prior to any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the mineral has been removed was $44,800. During 2020, 2,718,000 units of ore were extracted and 2,310,000 of these units were sold.

Required:
a. Compute the total amount of depletion for 2020.
b. Compute the amount that is charged as an expense for 2014 for the cost of the minerals sold during 2020.

Oct. 1 Stockholders invest $30,000 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $36,000.
3 Buys office furniture for $3,800, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads, $10,800 (not paid by Roads at this time).
10 Receives cash of $140 as commission for acting as rental agent renting an apartment.
27 Pays $700 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $3,000 in salary for October.
Required:
Prepare the debit—credit analysis for each transaction.