A14. (Cost of trade credit) Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms. Calculate the APR and the APY.
a. 5/10, net 50
b. 3/15, net 30
c. 2/10, net 20
Click here for the solution: Calculate the cost of skipping the discount and paying at the end of the net period for each of the following credit terms
Showing posts with label paying. Show all posts
Showing posts with label paying. Show all posts
Wednesday, April 13, 2016
Monday, August 17, 2015
Montgomery Company purchased an electric wax melter on April 30, 2013, by trading in its old gas model and paying the balance in cash
E10-18 (Nonmonetary Exchange) Montgomery Company purchased an electric wax melter on April 30, 2013, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase.
List price of new melter $15,800
Cash paid 10,000
Cost of old melter (5-year life, $700 residual value) 12,700
Accumulated depreciation—old melter (straight-line) 7,200
Secondhand fair value of old melter 5,200
Instructions
Prepare the journal entry(ies) necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Montgomery’s year ends on December 31, and depreciation has been recorded through December 31, 2012.
Click here for the solution: Montgomery Company purchased an electric wax melter on April 30, 2013, by trading in its old gas model and paying the balance in cash
List price of new melter $15,800
Cash paid 10,000
Cost of old melter (5-year life, $700 residual value) 12,700
Accumulated depreciation—old melter (straight-line) 7,200
Secondhand fair value of old melter 5,200
Instructions
Prepare the journal entry(ies) necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Montgomery’s year ends on December 31, and depreciation has been recorded through December 31, 2012.
Click here for the solution: Montgomery Company purchased an electric wax melter on April 30, 2013, by trading in its old gas model and paying the balance in cash
Sunday, July 19, 2015
Cleaner’s, Inc., is switching to paying employees every 2 weeks rather than weekly and will therefore “skip” 1 week’s pay
E16–2 Cleaner’s, Inc., is switching to paying employees every 2 weeks rather than weekly and will therefore “skip” 1 week’s pay. The firm has 25 employees who work a 60-hour week and earn an average wage of $12.50 per hour. Using a 10% rate of interest, how much will this change save the firm annually?
Click here for the solution: Cleaner’s, Inc., is switching to paying employees every 2 weeks rather than weekly and will therefore “skip” 1 week’s pay
Click here for the solution: Cleaner’s, Inc., is switching to paying employees every 2 weeks rather than weekly and will therefore “skip” 1 week’s pay
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