Bay Lake Mining Ltd. purchases earth-moving equipment on 1 August 20X6 and signs a three-year note with the supplier, agreeing topay $430,000 on 31 July 20X9. There is no interest in the note. The equipment purchased does not have a readily determinablemarket value. (PV of $1, PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.)Required:1-a. Does Bay Lake Mining Ltd. actually have a no-interest loan?1-b. This part of the question is not part of your Connect assignment.2. Calculate the present value of the note payable, using an interest rate of 7%. (Round time value factor to 5 decimal places andfinal answer to the nearest dollar amount.)YesNoPresent valueYear123Answer is complete and correct.$3. This part of the question is not part of your Connect assignment.4. Prepare a table that shows the balance of the note payable and interest expense over the life of the note. (Round your finalanswers to the nearest dollar amount.)لنا351,008Answer is complete and correct.InterestExpense @MarketRateOpeningNetLiability$ 351,008375,579401,870$24,57126,29128,130ClosingNetLiability$ 375,579401,870430,000

Usually when an equipment is purchased and agreed upon to pay at a later date, there is always a…

Answered: Bay Lake Mining Ltd. purchases…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Bay Lake Mining Ltd. purchases earth-moving equipment on 1 August 20X6 and signs a three-year note with the supplier, agreeing to pay $430,000 on 31 July 20X9. There is no interest in the note. The equipment purchased does not have a readily determinable market value. (PV of $1. PVA of $1, and PVAD of $1.) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Does Bay Lake Mining Ltd. actually have a no-Interest loan? 1-b. This part of the question is not part of your Connect assignment. 2. Calculate the present value of the note payable, using an interest rate of 7%. (Round time value factor to 5 decimal places and final answer to the nearest dollar amount.) Present value Year 3. This part of the question is not part of your Connect assignment. 4. Prepare a table that shows the balance of the note payable and Interest expense over the life of the note. (Round your final answers to the nearest dollar amount.) No 1 Yes No 2 1 2 3 3 Answer is complete and correct. $…
Manning Imports is contemplating an agreement to lease equipment to a customer for four years. Manning normally sells the asset for a cash price of $230,000. .Assume that 8% is a reasonable rate of interest. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What must be the amount of quarterly lease payments (beginning at the commencement of the lease) in order for Manning to recover its normal selling price as well as be compensated for financing the asset over the lease term? (Round your answers to nearest whole number and round percentage answer to 1 decimal place.)
1 QUESTION ONE [22] Lineos Limited, a South African vehicle brake pad making company, bought 5 industrial machines to use in the manufacture of their new brake pad range for the taxi industry. The machines were imported from a supplier in America at a cost of $22 000 each and were ordered on a FOB basis. Details of the order are as follows: - Ordered from the supplier on the 25th of May 2021 Shipped on the 16th of July 2021 - Arrived in South Africa on the 30th July 2021 Due to the technical and complex nature of the new machines, further costs were paid on the 31st of July 2021 to bring them into operation. The breakdown of the further costs was as follows:- The mixers had to be professionally installed: the installation was completed by a local specialist at a cost of R25 000 - The machines were extremely complex, and staff had to be retrained. Costs for training staff on how to use use the new machinery costed R25 000 - Costs to dispose of the brake pads that failed the safety tests…
On January 2, 2020, ABC Co. purchased a machine on credit terms 2/10, n/30. The invoice price was P40,000. Additional costs incurred in connection with the machine are as follows: Transportation-in: P1,200 Installation cost: P700 Testing costs prior to regular operation: P550 If the invoice is paid February 1, the acquisition cost of the machine must be a. P41,650 b. P41,100 c. P40,400 d. P39,200 e. answer not given
During the current fiscal year, Sandhill Corp. signed a long-term non-cancellable purchase commitment with its primary supplier. Sandhill agreed to purchase $1.92 million of raw materials during the next fiscal year under this contract. At the end of the current fiscal year, the raw material to be purchased under this contract had a market value of $1.56 million. What is the journal entry at the end of the current fiscal year? Debit Loss on Purchase Commitments for $360000 and credit Estimated Liability on Purchase Commitment for $360000 No journal entry is required O Debit Loss on Purchase Commitments for $1560000 and credit Estimated Liability on Purchase Commitments for $1560000 ○ Debit Estimated Liability on Purchase Commitments for $360000 and credit Loss on Purchase Commitments for $360000
VC purchased a machine for use in operations at a quoted price of $35,120. Full payment was cash of $8,000, plus a two-year non-interest-bearing note for $27,121. The market rate of interest for this note is 8 percent. VC should record the cost of the machine as (rounded to the nearest dollar): a. $32,950 b. $31,250 c. $23,250 d. $35,000 Please answer explaining in detail step by step without table and graph thankyou
On October 1, 2024, a company purchased a piece of land by agreeing to pay the seller $450,000 in two years. If the company had borrowed the money from a bank to pay the seller immediately, management estimates the bank would have required interest of 9% For what amount should the company record the land on the date of purchase (rounded to the nearest dollar)? (PV of $1. and PVA of $1) Multiple Choice O O $450,000 $369.000 $412,844 $378,756
Obra Ltd is your client. It has adopted IFRS as the financial reporting framework and has asked you to assist in dealing with the following issues. On I January 2014 Obra Ltd acquired a machine under the following terms. Manufacturer's base price GHS1,050,000 Trade discount (applying to base price only) 20% Early settlement discount taken (on the payable amount of the base cost only) 5% Freight charges GHS 30,000 Electrical installation cost GHS 28,000 Staff training in use of machine GHS 40,000 Pre-production testing GHS 22,000 Purchase of a three-year maintenance contract GHS60,000 Estimated residual value GHS 20,000 Estimated life in machine hours 6,000 hours Hours used -year ended 31 December 2014 - 1,200 hours - year ended 31 December 2015 1,800 hours - year ended 31 December 2016 (see below) 850 hours On I January 2016 Obra Ltd decided to upgrade the machine by adding new…
Cool Globe Inc. entered into two transactions, as follows: 1. Purchased equipment paying $20,000 at the date of purchase and signing a noninterest-bearing note requiring the balance to be paid in four annual installments of $20,000 on the anniversary date of the contract. Based on Cool Globe's 12% borrowing rate for such transactions, the implicit interest cost is $19,253. 2. Purchased a tract of land in exchange for $10,000 cash that was paid immediately and signed a noninterest-bearing note requiring five $10,000 annual payments. The first annual payment of the note is due in one year. The fair value of the land is $46,000. Required: Prepare the journal entries for these transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 2. Record the noninterest bearing note payable for the purchase of equipment for which $20,000 paid as down payment and balance to be paid in…
Arctic Cat sold Seneca Motor Sports a shipment of snowmobiles that have a fair market value of $38,300. Seneca paid for the snowmobiles on January 1, 2021, with delivery to occur subsequently. Unless informed otherwise, assume that Arctic views the time value of money component of this arrangement to be significant, and that the relevant interest rate is 11%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Assume that, on January 1, 2021, Seneca prepays Arctic for a December 31, 2021 delivery of the snowmobiles. Prepare the journal entry for Arctic to record collection on January 1, 2021, assuming Seneca prepays the present value of the snowmobiles. Prepare the journal entry for Arctic to record delivery of the snowmobiles on December 31, 2021. Assume instead that delivery is to occur on December 31, 2022. Prepare the journal entry for Arctic to record collection on January 1, 2021, assuming Seneca…
a) ABC Lid acquired a new packing line from QE Ltd on hire purchase on January 1, 201 1. The cash price (list price) was GHS54,000. The hire purchase agreement is as follows: • Initial deposit payment of GH59,000 on January 1, 2011; Payment of two annual instalment of GHS24,000 on December 31 of 2011, 2012 and a final instalment of GHS20,39 1 on December 31, 2013. • Implicit rate of interest is 25% per annum. It is the policy of ABC to depreciate the PL on straight line basis over 10 years, with no salvage value. Required: Show the ledger entries for the above transactions in the books of ABC Ltd b) On 1 October 2018 XYZ Ltd acquired a machine under the following terms. Hours Manufacturer's base price Trade discount (applying to base price only) Early settlement discount taken (on the payable amount of the base cost only) Freight charges Electrical installation cost Staff training in use of machine Preproduction testing Purchase of a three-year maintenance contract Estimated residual…
Nene crane ltd acquired equipment on January 1 2006 from quality engineering limited under a two year hire purchase agreement.This required an immediate deposit of 32,000 and a further half yearly installment of 32,000 starting on June 30th, 2006. The cash price was GHS 150,880 the company's financial year ends on 31 December. Required: i) Calculate and apportion the Hire Purchase interest over the relevant periods using the sun of the digits method. ii) Show the quality Engineering Account in the books of Nene Crane Ltd.

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS