Page 2 ACCOUNTING 2101/6101-TESTING YOUR KNOWLEDGE CHAPTER 6 3) Alexandra Katapoulos is creating a retirement plan, as follows: On her 30th birthday, she will begin making annual contributions of $20,000 into a retirement fund. The fund is expected to earn 5%, compounded annually. She will make 40 contributions into this fund. The first contribution is being made on her 30h birthday and the last contribution on her 69th birthday. She plans to withdraw $150,000 per year, the first withdrawal will be made on her 70 birthday. She anticpates that she will make 25 withdrawals REQUIRED a) What total accumulation would be needed on her 70t birthday to yield withdrawals of $150,000 per year? b) Will the fund have a sufficlent balance on her 70th birthday to enable her to withdraw $150,000 per year? Is there a shortage or overage? What is the amount of the shortage or overage? Shortage or overage (dircle one) c) Determine the amount of each of the 40 annual contributions into the fund (instead of $20,000) which wiN allow Ms. Katapoulos to make 25 withdrawals of $150,000 each year, as planned. 4) Blake, Inc. contracted to purchase a pice of equipment on November 1, 20x1 and agreed to make 8 equal payments of $2,000 on a semi-annual basis, with the first payment occurring on November 1.20 1. The appropriate interest rate is 6%. should be recorded for depreciation expense for the year ended December 31, 202, assuming a) the straight-line depreciation method is used; b) a 10 year lfe; c) an expected salvage value of 20% of original cost