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Model B requires the following payment schedule. Which model should you buy assuming 12% rate?YearPayment (Model 2)1$10,00029,00038,00045,00053,000Model 2
Model Byearpaymentpresent value1$10,0008928.57129,0008035.71438,0007142.85745,0004464.28653,0002678.571total31250Model Amodel Ayear paymentpresent value18,0007142.857143280007142.857143380007142.857143480007142.857143580007142.857143total35714.28571since model A has present value of 35714 and model B has total of 31250 we have to choose model b as appropriate choiceQuestion 3Prepare the journal entries for the following transactions for Dundar Mifflin:1.Dundar Mifflin purchased 1,200 shares of the total of 100,000 outstanding shares of Steve & Company stock for $20.75 per share plus a $70 commission.2.Steve & Company total earnings for the period are $84,000.3.Steve & Company paid a total of $40,000 in cash dividends to shareholders of record.