How to do it If beginning Rent Payable is $6,000 and the Company paid 15 months\

Question

How to do it If beginning Rent Payable is $6,000 and the Company paid 15 months' rent of $15,000 (and continues to rent the space through year-end), the ending financial statements would include 3) A. B. C. D. E. Rent Payable of $15,000 Rent Payable of $ 3,000 Prepaid Rent of $15,000 Rent Expense of $3,000. None of the above Darby purchased a new machine on January 1, for $210,000. Darby paid $10,000 down with the rest payable in 5 equal annual payments, beginning in one year, which include interest at 10%. The amount of each payment would be: 4) A. $ 40,000+ interest B. 26,379.75 C. 55,397.47 D. $ 52,759.50 E. Cannot be determined from information given 5) You want to have $100 in the bank in ten years, bank pays interest at 10% compounded semi-annually, how much do you need to put in today? A. $38.55 B. $37.69 C. $14.86 D. $10.00 E. none of these

Explanation / Answer

3) B. Rent payable of $3000 $ Rent payable at the beginning 6000 15 months rent equals to 15000 Monthly rent (15000/15) 1000 Hence the rent payable at the beginning is for 6 months ($6000/1000) Ending rent payable ((12-(15-6))*1000) 3000 4) D. $52,759.50 $ Net payable amount (210000-10000) 200000 Interest rate 10% Number of eaqual annual payments 5 PVIFA @ 10% 5 years 3.7908 Amount of each payment (200000/3.7908)            52,759 5) B. 37.69 $ Future value 100 Number of years 10 years Interest rate (compounded semi-annually) 10% FVIF @ 5% 20 years 2.6533 Amount need to put today (100/2.6533)              37.69

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