On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for...
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On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( EV of $1. PV of $1. EVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Promised to pay a fixed amount of $6,100 at the end of each year for eight years and a one-time payment of $115,200 at the end of the 8th year. b. Established a plant remodeling fund of $490,150 to be available at the end of Year 9. A single sum that will grow to $490,150 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,100 at the end of the first year, $112.600 at the end of the second year, and $150,100 at the end of the third year. d. Purchased a $170,500 machine on January 1 of this year for $34,100 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 3. In transaction (c), determine the present value of this obligation. (Round your answer to nearest whole dollar.) Present value On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): ( EV of $1. PV of $1. EVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.) a. Promised to pay a fixed amount of $6,100 at the end of each year for eight years and a one-time payment of $115,200 at the end of the 8th year. b. Established a plant remodeling fund of $490,150 to be available at the end of Year 9. A single sum that will grow to $490,150 will be deposited on January 1 of this year. c. Agreed to pay a severance package to a discharged employee. The company will pay $75,100 at the end of the first year, $112.600 at the end of the second year, and $150,100 at the end of the third year. d. Purchased a $170,500 machine on January 1 of this year for $34,100 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year. 3. In transaction (c), determine the present value of this obligation. (Round your answer to nearest whole dollar.) Present value
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Related Book For
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short
Posted Date:
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