On january 1 2010 fishbone corporation sold a building that

Assignment Help Accounting Basics

Reference no: EM13599957

a)On January 1, 2010, Fishbone Corporation sold a building that cost $250,000 and that had accumulated depreciation of $100,000 on the date of sale. Fishbone received as consideration a $240,000 noninterest-bearing note due on January 1, 2013. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2010, was 9%. At what amount should the gain from the sale of the building be reported?

(b) On January 1, 2010, Fishbone Corporation purchased 300 of the $1,000 face value, 9%, 10-year bonds of Walters Inc. The bonds mature on January 1, 2020, and pay interest annually beginning January 1, 2011. Fishbone purchased the bonds to yield 11%. How much did Fishbone pay for the bonds?

(c) Fishbone Corporation bought a new machine and agreed to pay for it in equal annual installments of $4,000 at the end of each of the next 10 years. Assuming that a prevailing interest rate of 8% applies to this contract, how much should Fishbone record as the cost of the machine?

(d) Fishbone Corporation purchased a special tractor on December 31, 2010. The purchase agreement stipulated that Fishbone should pay $20,000 at the time of purchase and $5,000 at the end of each of the next 8 years. The tractor should be recorded on December 31, 2010, at what amount, assuming an appropriate interest rate of 12%?

(e) Fishbone Corporation wants to withdraw $120,000 (including principal) from an investment fund at the end of each year for 9 years. What should be the required initial investment at the beginning of the first year if the fund earns 11%?

Reference no: EM13599957

Questions Cloud

The gorman group issued 900000 of 13 bonds on june 30 2011 : the gorman group issued 900000 of 13 bonds on june 30 2011 for 967707. the bonds were dated on june 30 and mature on

Manning company issued 10000 shares of its 5 par value : manning company issued 10000 shares of its 5 par value common stock having a market value of 25 per share and 15000

Foam pet mattress company can sell as many pet bed models a : foam pet mattress company can sell as many pet bed models a and b that it can produce but the company has limited

The production department started the month with the : the production department started the month with the beginning goods in process inventory of 350000. during the month

On january 1 2010 fishbone corporation sold a building that : aon january 1 2010 fishbone corporation sold a building that cost 250000 and that had accumulated depreciation of

Hemingway inc applies factory overhead based on direct : hemingway inc. applies factory overhead based on direct labor costs. the company incurred the following costs during

Roy company purchased 25 of dale company for 600000 on : roy company purchased 25 of dale company for 600000 on january 1 2010. on the date of purchase dales book value was

On august 31 jenks co partially refunded 180000 of its : on august 31 jenks co. partially refunded 180000 of its outstanding 10 note payable made 1 year ago to arma state bank

Song earns 152000 taxable income as an interior designer : song earns 152000 taxable income as an interior designer and is taxed at an average rate of 25 percent i.e. 38000 of

User Account

All Pages