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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Prince Albert Canning PLC had a net loss of 37,543 on sales of 345,182. What was the companys profit margin? Does the fact that these figures are quoted in a foreign currency make any difference?...
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The interest rates in the UK and the United States are, respectively, \(4 \%\) and \(6 \%\) per annum compounded continuously. The spot price of the UK pound is \(\$ 1.6\). The forward price for a UK...
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Sunshine Beach Company manufactures suntan lotion, called Surtan, in 11-ounce plastic bottles. Surtan is sold in a competitive market. As a result, management is very cost conscious. Surtan is...
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3. (3 pts) Use Python to write a function that takes a single input, a list of numbers. The function should loop through the list and, on each iteration, print the number if it is the largest number...
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When Pablo Gonzalez died unmarried in 2018, he left an estate valued at $7,850,000. His trust directed distribution as follows: $20,000 to local hospital, $160,000 to his alma mater, and the...
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Calculate the average inflation rate for a four - year period. The first year's inflation rate is 4 % , the second year's rate is 8 % , the third year rate is 5 % and the fourth year rate is 2 % with...
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Each land parcel belongs to the first or inner ring, the second ring, the third ring, or beyond. To be clear, the rings are disjoint, so the phrase 'second ring' excludes the first. A district may...
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What does alternative media do best when included in a brands promotional mix?
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Verify the following trigonometric integral for integer \(k\) : \[ \int_{0}^{2 \pi} \sin (x / 2) \cos (k x) d x=\frac{-4}{4 k^{2}-1} . \] Hence find the coefficients \(\lambda_{k}\) in the Fourier...
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How does mobile employ location-based capabilities?
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When should brands employ mobile advertising?
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We have the following trajectory of the winner (Outcome) of a tennis game [CO1,C2, between Naomi Osaka (N) and Federer (F). Construct a decision tree using ID3 Mark: 7+3] algorithm to predict the...
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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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The overall process of creating a capital budget proposal has a lot of similarities to writing a business plan for a start-up company. Describe three aspects of the similarities between a budget...
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There are three general categories of capital budget scenarios: replacement, expansion, and investment in a NewCo. Describe the overall decision-making context for each. How do they draw on similar...
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In analysis, some focus seems to be on the need for NPV equations to be applied to projects that are mutually exclusive. But in practice we find that the lines are blurred in capital budgeting....
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