Question: On December 31, 2016, Bart Inc. purchased a machine from Fell Corp. in exchange for a noninterest-bearing note requiring eight payments of $20,000. The first

On December 31, 2016, Bart Inc. purchased a machine from Fell Corp. in exchange for a noninterest-bearing note requiring eight payments of $20,000. The first payment was made on December 31, 2016, and the remaining seven payments are due annually on each December 31, beginning in 2017. At the date of the transaction, the prevailing rate of interest for this type of note was 11%. Present value factors are as follows:

Period	Present value of ordinary annuity of 1 at 11%	Present value of an annuity due of 1 at 11%
7	4.712	5.231
8	5.146	5.712

The initial value of the machine is

$114,240

$104,620

$ 94,240

$102,920

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Annual payments to be made 200... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

On Jan. 1, 2021, Company E purchased a machine from Company G by issuing a 12%, $10,000, three-year installment note that requires interest to be paid semi-annually. Assume that the machine could...

King Corporation purchased a machine from Gutten Corporation on credit for 150,000. At the date of purchase, the exchange rate was $1.00 per euro. On the date of the payment, which was made in euros,...

A deferred ordinary annuity is comprised of eight annual payments of $1500. What is the period of deferral if the present value of the payments, discounted at 7.9% compounded annually, is $6383.65

The following questions are used in the Kaplan CPA Review Course to study property, plant, and equipment and intangible assets while preparing for the CPA examination. Determine the response that...

The following questions are adapted from a variety of sources including questions developed by the AICPA Board of Examiners and those used in the Kaplan CPA Review Course to study property, plant,...

Action, Inc., had the following sales and purchase transactions during 2013. Beginning inventory consisted of 120 items at $80 each. Action uses the FIFO cost flow assumption and keeps perpetual...

In the summer of 2017, Reigh Webster and her friend Ella Hill were relaxing in a local watering hole complaining about their boring monotonous jobs. Reigh told Ella that she has been saving her money...

1. In 2008, Abes Mascot Action Figures Co. recently sold land with a fair market value of $496,736 to Uga Dog Biscuits Co. In 2001, Aubrey had purchased the land for $600,000. In exchange for the...

Creative Awnings had the following sales and purchase transactions during 2013. Beginning inventory consisted of 50 items at $350 each. The company uses the FIFO cost flow assumption and keeps...

It is now mid-September Year 3. Growth Investments Limited (GIL) has been owned by Sam and Ida Growth since its incorporation under the Canada Business Corporations Act many years ago. The owners,...

Suppose the mass of an object as a function of volume is given by M = pV. If p = 2.0 g/cm3, how close must V be to 2.5 cm3 for M to be within 0.2 g of 5.0 g? Find the accuracy of input necessary to...

Part of your firm's evaluation of a supplier's performance is based on the degree to which it seamlessly delivers goods and materials. A recent complication for global suppliers is an initiative to...

What is considered the ultimate measure of a firms performance? How the firm's earnings are valued by investors. The number of shareholders the firms has. The firm's current profits. The total...

Software Solution (SOS) helps subscribers solve software problems. All transactions are made over the telephone. For the year 2015, 10 engineers, most of whom are recent graduates, handled 100,000...

Gogeon Inc. uses a calendar year for financial reporting. The company is authorized to issue 50 million common shares. At no time has Gogeon issued any potentially dilutive securities. The following...

Baby Toys Co. produces fine porcelain dolls that are sold in exclusive gift shops. The controller and sales manager are discussing potential price increases and have started looking at various costs...

For a recent year, Target Corporation reported revenue of $65,786 million. Its gross profit was $20,061 million. What was the amount of Targets cost of merchandise sold?

The Age Discrimination in Employment Act mandates that workers 40 years of age or older be treated without regard to age in all phases of employment (hiring, promotions, firing, etc.). Age...

What is correct answer Margaret is at a friend's house, toasting their graduation from high school. Margaret is getting tipsy and tired and decides to go home. Margaret's friend protests and asks her...

The Canliss Milling Company purchased machinery on January 2, 2009, for $800,000. A five-year life was estimated and no residual value was anticipated. Canliss decided to use the straight-line...

The following Trueblood case is recommended for use with this chapter. The case provides an excellent opportunity for class discussion, group projects, and writing assignments. The case, along with...

Carlson Auto Dealers Inc. sells a handmade automobile as its only product. Each automobile is identical; however, they can be distinguished by their unique ID number. At the beginning of 2011,...

Raven has just finished learning a list of nonsense words given to her by her psychology instructor as part of a class activity. She had 100 percent recall at the end of class. According to...

Shantel spent a year living abroad in Spain. During that time, her ability to read and speak Spanish grew tremendously. However, now, 2 years later, Shantel feels she can no longer travel there...

Henry Gustav Molaison (H.M.) suffered from profound anterograde amnesia after his ____________ were surgically removed in an attempt to control his seizures. a. hippocampi b. amygdalae c. frontal...