Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done...
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Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate Blossom Industries Corp. purchased the following assets and also constructed a building. All this was done during the current year using a variety of financing alternatives. Assets 1 and 2 These assets were purchased together for $116,000 cash. The following information was gathered: Depreciation Initial Cost on to Date on Book Value on Description Seller's Books Appraised Seller's Books Seller's Books Value Machinery $119,000 $51,000 $68,000 $90,000 Equipment 68,000 10,000 58,000 30,000 Asset 3 This machine was acquired by making a $9,000 down payment and issuing a $30,500, two-year, zero-interest-bearing note. The note is to be paid off in two $15,250 instalments made at the end of the first and second years. It was determined that the asset could have been purchased outright for $34,600. Asset 4 A truck was acquired by trading in an older truck that has the same value in use. The newer truck has options that will make it more comfortable for the driver; however, the company remains in the same economic position after the exchange as before. Facts concerning the trade-in are as follows: Cost of truck traded $108,000 Accumulated depreciation to date of exchange 35,000 Fair market value of truck traded 80,000 Cash paid by Blossom 9.300 Fair market value of truck acquired 70,000 Asset 5 Equipment was acquired by issuing 120 common shares. The shares are actively traded and had a closing market price a few days before the equipment was acquired of $11 per share. Alternatively, the equipment could have been purchased for a cash price of $1,295. Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156.000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117.000 June 1 360.000 Sept. 1 486.000 Nov. 1 106.000 for a cash price of Construction of Building A building was constructed on land that was purchased January 1 at a cost of $156,000. Construction began on February 1 and was completed November 1. The payments to the contractor were as follows: Date Payment Feb. 1 $117,000 June 1 360,000 Sept. 1 486,000 Nov. 1 106,000 To finance construction of the building, a $612,000, 12% construction loan was taken out on February 1. At the beginning of the project, Blossom invested the portion of the construction loan that was not yet expended and earned investment income of $4,900. The loan was repaid on November 1 when the construction was completed. The firm had $191,000 of other outstanding debt during the year at a borrowing rate of 11% and a $199.000 loan payable outstanding at a borrowing rate of 8%. Your answer is partially correct. Blossom uses a variety of alternatives to finance its acquisitions. Record the acquisition of each of these assets, assuming that Blossom prepares financial statements in accordance with IFRS. Use the net amount to record the note. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Round capitalization rate to 2 decimal places, e.g. 52.75% and final answers to O decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit Acquisition of Assets 1 and 2 Machinery 87000 29000 Equipment Cash 116000 Acquisition of Asset 3 39500 Machinery 30500 Notes Payable 9000 Cash Acquisition of Asset 4 82300 Vehicles 35000 Accumulated Depreciation- Vehicles 9300 Cash 108000 Vehicles Machinery 39500 Notes Payable 30500 Cash 9000 Acquisition of Asset 4 Vehicles 82300 Accumulated Depreciation - Vehicles 35000 Cash 9300 Vehicles 108000 Acquisition of Asset 5 Equipment 156000 Common Shares 156000 Construction of Building Buildings 1179370 Land 156000 Cash 1069000 110370 Interest Expense Assistance Used eTextbook and Media e Textbook 1 e Textbook 2 eTextbook 3 eTextbook 4 List of Accounts X Your answer is incorrect. What was the effective interest rate used in negotiating the note payable used to acquire the machinery in Asset 3? Use Excel or a financial calculator to arrive at your answer. (Round final answer to 3 decimal places, eg. 1.234%.) 14.16 Effective interest rate
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Date Account Dr Cr Machinery 116000900009000030000 Equipment 116000300009000030000 Cash 8700029000 T... View the full answer
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How often should variances be reported to management? What principle may be used with variance reports?
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Which of the following indicates a satisfactory situation from the viewpoint of good internal control? (a) The cashier reports to the treasurer. (b) Payroll accounting reports to the controller. (c)...
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Liang Company began operations on January 1, 2014. During its first two years, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad...
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Should American corporations utilize factories and workers overseas where conditions might not be safe? Consider theBangladesh garment factory collapse in 2013that killed more than 1,000 workers in...
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The following information relates to the Samson Ltd for the year ended 31 December 2023: 1. Consolidated revenue amounted to R2,311,200 for the year. The costs to deliver these goods to clients...
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Use Quicksort as shown in class and sort the following file by hand and selecting the first element as the split element: 71,19,74,41,12,80,38,31,100,45,86,31,22 (a) After the initial swapping, there...
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1.In 1987, the United Nations Commission defined sustainability as; Brundtland "Meeting the needs of the present without compromising the ability of future generations to meet their own needs."...
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Explain whether our country is in an inflationary gap or a recessionary gap by the placement of the aggregate supply and aggregate demand curve in terms of the long run aggregate supply curve? How do...
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In October, Pine Company reports 20,800 actual direct labor hours, and it incurs $115,460 of manufacturing overhead costs. Standard hours allowed for the work done is 25,100 hours. The predetermined...
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Find the maximum of: Z = 4x + 10x2 Subject to the constraints: 2x1 + x 50 2x1 + 5x2 100 2x1 +3x290 and X, X 0
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Real Cool produces air conditioners in two departments: Assembly and Finishing. Budgeted information follows. Department Assembly Finishing Budgeted Cost $414,000 21,000 Allocation Base Machine hours...
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9. Use the information below to answer question a to i Par value 1000 Coupon rate 10% of par, paid annually Maturity = 5 years YTM = 8% at time 0 a.What is the price of this bond at time 0? b.What is...
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Repeat Exercise 16.6 using the t-test of the coefficient of correlation. Is this result identical to the one you produced in Exercise 16.6?
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Recognized limitations of financial statement analysis include each of the following except: a. companies in the same industry using different accounting methods. b. inflation. c. different levels of...
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How do horizontal analysis and vertical analysis of financial statements differ?
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What is a business segment? Why are gains and losses from a discontinued segment reported in a separate section of the income statement?
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