Short Company purchased land by paying $22,000 cash on the purchase date and agreed to pay $22,000 for each of the next seven years beginning one-year from the purchase date. Short's incremental borrowing rate is 10%. On the balance sheet as of the purchase date, after the initial $22,000 payment was made, the liability reported is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Answers

Answer 1

Answer:

The liability reported is closest to $107,105.21.

Explanation:

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

Where;

PV = Present value or the the liability reported  =?

P = Annuity payment = $22,000

r = Student's desired return rate = 10%, or 0.10

n = number of years = 7

Substitute the values into equation (1) to have:

PV = $22,000 * ((1 - (1 / (1 + 0.10))^7) / 0.10)

PV = $22,000 * 4.86841881769293

PV = $107,105.21

Therefore, the liability reported is closest to $107,105.21.


Related Questions

During the 1970s, some economists argued that the cause of the woes of the economy were due to __________. g

Answers

Explanation:

Stagflation. Which is stagnant growth combined with inflation. Which was caused in large part by repeated disruptions to global oil supplies, which led to soaring prices and gasoline shortages in the United States.

Grey, Inc., uses a predetermined rate to apply overhead. At the beginning of the year, Grey budgeted its overhead costs at $220,000, direct labor hours at 55,000, and machine hours at 20,000. Actual overhead costs incurred were $233,250, actual direct labor hours were 62,000, and actual machine hours were 15,000. If the PDOH rate uses machine hours as the cost driver, what is the total amount credited to the overhead account control account

Answers

Answer:

$165,000

Explanation:

Calculation for what is the total amount credited to the manufacturing overhead account for the year for Grey

First step is to calculate Predetermined overhead rate using this formula

Predetermined overhead rate = Estimated overhead costs / Estimated machine hours

Let plug in the formula

Predetermined overhead rate = $220,000 / 20,000 machine hours

Predetermined overhead rate= $11

Second step is to calculate Total amount credited to the factory overhead account for the year for Grey

Using this formula

Total amount credited to the factory overhead account for the year for Grey = Predetermined overhead rate × Actual machine hours

Let plug in the formula

Total amount credited to the factory overhead account for the year for Grey= $11 × 15,000 machine hours

Total amount credited to the factory overhead account for the year for Grey = $165,000

Therefore the Total amount credited to the factory overhead account for the year for Grey will be $165,000

Sandra goes into her favorite shoe store where they are holding a special sales promotion. The salesperson explains to Sandra that if she purchases one pair of shoes, she would receive a free pair of socks. Which type of sales
promotion is this?
NEED ASAPPP ITS AN EXAM..

Answers

Answer:

Premium

Explanation:

A premium type of sales promotion is this. Thus, option B is correct.

Who is a salesperson?

The salesman is in charge of welcoming clients, guiding them toward the merchandise they need, and counting up transactions. You need to be a great communicator if you want to succeed in sales. A successful salesman achieves sales goals while being courteous and helpful to consumers.

The salesman is in charge of welcoming clients, guiding them toward the merchandise they need, and counting up transactions. You need to be a great communicator if you want to succeed in sales. A successful salesman achieves sales goals while being courteous and helpful to consumers.

With the confirmation of purchase, you can receive a reward for nothing or for minimal shipping as well as a handling fee. Therefore, option B is the correct option.

Learn more about salesperson, here:

https://brainly.com/question/1175840

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Susan won $2,000 at the blackjack tables on her birthday. Her winnings are an example of:________.
a. an in-kind transfer.
b. transitory income.
c. life-cycle income.
d. permanent income.

Answers

Answer:

B. Transitory income.

Explanation:

As the name sounds, it is seen to be a form of income that is said to be anticipated. This form of income does not play key roles in the standard of living of the said person. This income is clearly a short-lived kind as it cannot hold a person or family towards a certified period of time. Also in many cases, economists are seen to believe that people base their consumption on their permanent income, therefore, inequality in consumption is one gauge of inequality of permanent income; making consumption less effectective, as transitory changes in income, they are more equally is current income.

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