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Accounting 200  Exam 3 Study Guide
Fundamentals
Components of Multistep Income Statement and Classified Balance Sheet
How does a journal entry impact the accounting equation?
Which financial statements are affected by a journal entry?
Appendix C
Calculate present value of single sum
What is something worth today
I want x amount in # of years, how much would I need to invest now/today
Calculate present value of an annuity
I want x amount every year for # of years. How much do I invest today
Calculate future value of a single sum
You invest x today, what is it worth in # of years
Calculate future value of an annuity
Invest x amount every year, what is it work in # of years.
Calculate present value of Bond Payable (when stated interest rate is not equal to
market interest rate)
Use present value of one table and use the market rate
Use present value multiplied by contract rate
Multiply that answer times the present value of annuity for market rate
This equals total present value of a bond after you add the numbers up
Questions:
1) I will receive 1,000 in 3 yrs, what is the present value of this today assuming 6%?
2) Gold Co. buys equipment term are to pay 10000 a year for 6yrs assume 8%, what is
the
PV of this series of payments?
3) Gabe puts 2500 in savings account, what will it be worth in 3yrs assuming 9%?
4) Gabby puts 2500 in a savings account every year, what is it worth in 3 yrs at 9%.
5) Investor buys 200,000, 10 yr bonds, contract rate is 10% after holding the investment
for
2 yrs (8 left) what is the price of the bond with a market rate of 8%?
Chapter 10 and Appendix 10B
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 Spring '07
 Cohen
 Accounting, Balance Sheet, Income Statement

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