Homework Solutions Chapter 6 and 7.doc - Session 2 Interest computation principle,interest rate time Ordinary annuity 普通年金 annuity due

Homework Solutions Chapter 6 and 7.doc - Session 2 Interest...

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Session 2 Interest computation: principle,interest rate, time Ordinary annuity 普通年金 annuity due 预付年金 退货 sales returns and allowances 坏账损失 bad debt expense/ allowance for doubtful accountants Methods of accounting for uncollectible accountants Direct Write-off Method:unacceptable Allowance Method:percentage of receivables Notes receivable:better than stocks; more money Face value=par value 平价 premium 溢价 discount 折价 Zero-interest bearing notes: Par value*PV Notes receivable --cash; notes receivable---interest revenue Derecognition of receivables: transfer all the risks and rewards Accounts Receivable Turnover = Net Sales Average Trade Receivables (net) Homework Solutions Chapter 6 & 7 EXERCISE 6.6 (15–20 minutes) (a) Future value of ¥1,200,000 @ 10% for 10 years (¥1,200,000 X 2.59374) = ¥ 3,112,488 (b) Future value of an ordinary annuity of W 620,000 at 10% for 15 years (W 620,000 X 31.77248) W 19,698,937 Deficiency (W 20,000,000 – W 19,698,937) W 301,063 (c) R$75,000 discounted at 8% for 10 years: R$75,000 X .46319 = R$ 34,739 Accept the bonus of R$40,000 now. (Also, consider whether the 8% is an appropriate discount rate, considering whether the president can earn compound interest at a higher rate without too much additional risk.) LO: 2,3,4, Bloom: AP, Difficulty: Moderate, Time: 15-20, AACSB: Analytic, AICPA BB: Critical Thinking, AICPA FC: Reporting, AICPA PC: Problem Solving EXERCISE 6.7 (12–17 minutes)
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E6.7 (LO5) (Computation of Bond Prices) What would you pay for a
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