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Unformatted text preview: E928:
1. What is the cost of the machine to Freddy’s Restoration Company?
Machine cost
$45,000
Sales tax
2,000
Delivery costs
1,000
Assembly cost
1,400
Cost of machine
$49,400
2. What is the amount of the first full year’s depreciation if Freddy’s uses the
straight line method?
49,400
Depreciation expense=
= $3,293 depreciation expense/year
15 years
E 942:
1. What amount will the individual assets of Stansbury Island be recorded on the book
of Stringtown, the acquiring company?
Cash
$1,800,000
Liability
$(400,000)
Recorded on the book of Stringtown
$1,400,000
2. How will Stringtown account for the liabilities of Stansbury Island
Account receivable ………………….. $300,000
Inventory …………………………….. 600,000
Property, plan and equipment………… 900,000
Goodwill………………………………..400,000
Liability……………………………………400,000
Cash ……………………………………….1, 400,000
3. How much goodwill will be record as part of this acquisition?
Goodwill = $400,000
P1044:
1. Determine the present value in each of the following situation
a)
Amount of payment
Present value of $1 in 20 periods at 2% interest (table1)
Present value of payment
b) Amount of payment
Present value factor of $1 in 12 periods at 6%interest (table1)
Present value of payment c) Amount of payment
Present factor of $1 in 12periods at 1% interest (table 2)
Present value $9,000
0.6730
$6,057
$12,000
0.4970
$5,964
$6,000
11.2551
$67,530.6 2. Determine the future value in each of the following situation
a)
Present value
Future value factor of $1 in 8 periods at 4% interest (table 3)
Future value
b) Present value
Future value factor of $1 in 60 period at 3% interest (table 3)
Future value $20,000
1.3686
$27,372
$40,000
5.8916
$235,664 ...
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This note was uploaded on 06/20/2011 for the course ECON 123 taught by Professor Mrews during the Spring '11 term at Korea Advanced Institute of Science and Technology.
 Spring '11
 mrews

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