# Answer the following questions. (a) On May 1, 2012, Goldberg Company sold some machinery to Newlin Company on an installment contract basis. The contract required five equal annual payments, with the first payment due on May 1, 2012. What present

(a) On May 1, 2012, Goldberg Company sold some machinery to Newlin Company on an installment contract basis. The contract required five equal annual payments, with the first payment due on May 1, 2012. What present value concept is appropriate for this situation?
(b) On June 1, 2012, Seymour Inc. purchased a new machine that it does not have to pay for until May 1, 2014. The total payment on May 1, 2014, will include both principal and interest. Assuming interest at a 12% rate, the cost of the machine would be the total payment multiplied by what time value of money concept?
(c) Costner Inc. wishes to know how much money it will have available in 5 years if five equal amounts of \$35,000 are invested, with the first amount invested immediately. What interest table is appropriate for this situation?
(d) Jane Hoffman invests in a “jumbo” \$200,000, 3-year certificate of deposit at First Wisconsin Bank. What table would be used to determine the amount accumulated at the end of 3 years?

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## Intermediate Accounting

ISBN: 978-0470587287

14th Edition

Authors: kieso, weygandt and warfield.

Question Details
Chapter # 6
Section: Questions
Problem: 17
Posted Date: October 11, 2011 09:05:11