true when accounts receivable are factored for a promissory note issued to 70) w
ID: 2594972 • Letter: T
Question
true when accounts receivable are factored for a promissory note issued to 70) which ofthe wang A) The the factor by the owner of the B) The over the C) The factor the risk of and absorbs any credit in collecting the losses D) The transaction may be accounted for either as a secured borrowing or as a sale, depending upon the substance of the 71) Before testing property, plant, and equipment (PPE) and finite-life intangible (FLI) assets A) the firm will assess PPE as individual assets and FLI assets in asset B) the firm will assess PPE in asset groups and FLI assets as individual C) the firm will assess both PPE and FLI assets in asset groups D) the firm will assess both PPE and FLI assets as individual assets or in asset groups 72) At the beginning of 2017, Denero Company issued 10-year bonds with a face value of $4,000,000 due on December 31, 2027. The company will accumulate a fund to retire these bonds at maturity. It will make ten annual deposits to the fund beginning on December 31, 2017. How much must Denero deposit each year to achieve this investment goal, assuming that it will earn 12% interest compounded annually? A) $203,515 B) $226,009 ) $227,937 $363,636 ) Which of the following is not a major characteristic of a fixed asset? acquired for resale tangible in nature expected to be used for more than one year sed in the production and sale of other assets e-Intermediate I, Fall 2017 Final Exam 18]PageExplanation / Answer
70) when account receivables are factored without recourse i.e. non recourse factoring
Explanation:- In case of non recourse factoring bad debt expenses are borne by factor.The whole of the receivables are transferred to factor and company receives certain fixed from factor in exchange of its recievables.
It is the factor who will deal with receivables onits own end and compny has nothing to do with its collection criiteria
hence Ans is :- C)
71) Before testing assets for impairment, a firm must determine whether to assess them as individual assets or in asset groups.
If cash flows are identifiable and independent for an individual asset such as a delivery truck, the firm can test the delivery truck for impairment. Alternatively, if the delivery truck is part of a fleet of the store's delivery trucks, the delivery fleet could be considered an asset group. The rationale is that the cash flows from an individual truck are dependent on the cash flows from the other trucks in the fleet.
ANS :- D)
72) In this case we have have to find out equal annual 10 deposits whose Future value is 4000,000, since we are required to pay 4,000,000 after 10 years hence we must deposit an amount each year such that we get 4,000,000 at 10Nth year.
Let the equal amount be X
formula for future value, FV = A/i [(1+i)n -1]
Fv= 4,000,000
A= x
i= 12%
n= 10 years
so , 4,000,000 = x/.12 [(1.12)10-1]
4,000,000*.12= x [ (1.12)10-1]
480,000 = 2.10585 X
X = 480,000/2.10585 = 227937 approx (ANS =C)
73) fixed asset is not acquired for resale, rather it is acquired to support day to day operation
even if asset doesn't have any resale value then even we buy that asset for pre determined purpose.
hence ans : A
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