Help would be great with these accounting questions 1. A landscaping firm has qu

Question

Help would be great with these accounting questions

1.

A landscaping firm has quoted a price of $10,500 to fix up Sally's back yard. Five years she put $7,500 into a home improvement account that has earned an average of of 6% per year (annual compounding. Does Sally have enough in this account to pay for the landscaping?

Maybe

No

There is not enough information given to solve this problem

Yes

There is too much information given to solve this problem

2.

Which one of the following statements is true?

Interest makes a dollar today worth more than a dollar tomorrow

Interest makes a dollar today worth less than a dollar tomorrow

Interest has no effect on the value of a dollar

None of the other alternatives are correct

Interest makes a dollar today worth the same as a dollar tomorrow

3.

A construction corporation is attempting to borrow money on a note secured by some of its property. A bank agrees to accept the note, provided that the president of the corporation will personally endorse it. What is the point of this requirement?

To make the note legally enforceable against the corporation

To make the president personally responsible for the debts of the corporation

To put in writing that the person signing with the bank is related with the corporation

To evidence that the president is loaning the money to the corporation

None of the other alternatives are correct

4.

Which method gives higher interest expense in the last year when the bonds are issued for more than par?

declining balance method of accounting for interest expense on bonds

effective interest method of accounting for interest expense on bonds

straight-line method of accounting for interest expense on bonds

None of the other alternatives are correct

All the three statements about bonds are correct

Explanation / Answer

1 Amount in the account after 5 years=7500*(1+0.06)^5=7500*1.34=10050 Amount required for landscaping=$10500 Hence,There is a shortage of $ 450 (10500-10050) 2 Interest makes a dollar today worth more than a dollar tomorrow 3 To make the president personally responsible for the debts of the corporation 4 straight-line method of accounting for interest expense on bonds

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