D103 Units 5-7 Pre Assessment Latest
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, A company deposits $10,000 in a bank where it will earn simple interest of 10% annually. What is the
amount of interest earned in Year 2? - correct ans:$1,000
A company is putting together a list of transactions that are affected by the time value of money. Which
transaction should be included in this list? - correct ans:Long-term leases
A company needs to have $70,000 in cash at the end of four years. The company can invest the cash
now in a money market account that will return 6% interest compounded annually. Using a 6% interest
rate, the implied annual interest is $70,000 × 0.06 = $4,200.
The following information is given:
Assuming an annual interest rate of 4% for 6 years is appropriate, the present value of the deposit is
$70,000 × 0.79031 = $55,322.
Assuming an annual interest rate of 6% for 4 years is appropriate, the present value of the deposit is
$70,000 × 0.79209 = $55,446.
Assuming an annual interest rate of 6% for 6 years is appropriate, the present value of the deposit is
$70,000 × 0.70946 = $49,662.
How much does this company need to deposit today? - correct ans:$55,446
Company A sells a parcel of land to Company B in exchange for a note receivable. The terms of the note
require Company B to make a single payment of $600,000 in two years. Using a 10% interest rate, the
implied annual interest is $600,000 × 0.10 = $60,000, and the present value of the note is $600,000 ×
0.82645 = $495,870.
Which amount must Company A consider as the proceeds from the sale of the land in order to calculate
gross profit or gain/loss on the sale in accordance with generally accepted accounting principles (GAAP)?
- correct ans:$495,870
A company performs services for a customer in exchange for a noninterest-bearing note. The customer
agrees to make a payment of $100,000 in three years. Using a 5% interest rate, the implied annual
interest is $100,000 × 0.05 = $5,000, and the present value of the note is $100,000 × 0.86384 = $86,384.
Which amount must this company record as service revenue from this transaction in accordance with
generally accepted accounting principles (GAAP)? - correct ans:$86,384
recent and frequently tested exam with
comprehensive questions and verified
accurate solution (detailed & elaborated)
GRADED A+
Professional Academic Assistance Services
Services Offered
Proctored Exam Assistance
Online Class Management (Full Course Support)
Exam Preparation & Study Materials
Assignments and Coursework Support
Essays and Research Papers
Discussion Posts and Replies
CONTACT INFORMATION
WHATAPPSLINK- https://wa.me/254784769540
, A company deposits $10,000 in a bank where it will earn simple interest of 10% annually. What is the
amount of interest earned in Year 2? - correct ans:$1,000
A company is putting together a list of transactions that are affected by the time value of money. Which
transaction should be included in this list? - correct ans:Long-term leases
A company needs to have $70,000 in cash at the end of four years. The company can invest the cash
now in a money market account that will return 6% interest compounded annually. Using a 6% interest
rate, the implied annual interest is $70,000 × 0.06 = $4,200.
The following information is given:
Assuming an annual interest rate of 4% for 6 years is appropriate, the present value of the deposit is
$70,000 × 0.79031 = $55,322.
Assuming an annual interest rate of 6% for 4 years is appropriate, the present value of the deposit is
$70,000 × 0.79209 = $55,446.
Assuming an annual interest rate of 6% for 6 years is appropriate, the present value of the deposit is
$70,000 × 0.70946 = $49,662.
How much does this company need to deposit today? - correct ans:$55,446
Company A sells a parcel of land to Company B in exchange for a note receivable. The terms of the note
require Company B to make a single payment of $600,000 in two years. Using a 10% interest rate, the
implied annual interest is $600,000 × 0.10 = $60,000, and the present value of the note is $600,000 ×
0.82645 = $495,870.
Which amount must Company A consider as the proceeds from the sale of the land in order to calculate
gross profit or gain/loss on the sale in accordance with generally accepted accounting principles (GAAP)?
- correct ans:$495,870
A company performs services for a customer in exchange for a noninterest-bearing note. The customer
agrees to make a payment of $100,000 in three years. Using a 5% interest rate, the implied annual
interest is $100,000 × 0.05 = $5,000, and the present value of the note is $100,000 × 0.86384 = $86,384.
Which amount must this company record as service revenue from this transaction in accordance with
generally accepted accounting principles (GAAP)? - correct ans:$86,384
