Answer the following questions. (a) On May 1, 2015, Goldberg Company sold some machinery to Newlin Company

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Answer the following questions.

(a) On May 1, 2015, Goldberg Company sold some machinery to Newlin Company on an installment contract basis. The contract required five equal annual payments, with the first payment due on May 1, 2015. What present value concept is appropriate for this situation?

(b) On June 1, 2015, Lin Inc. purchased a new machine that it does not have to pay for until May 1, 2017. The total payment on May 1, 2017, will include both principal and interest. Assuming interest at a 12% rate, the cost of the machine would be the total payment multiplied by what time value of money concept?

(c) Guha Company wishes to know how much money it will have available in 5 years if five equal amounts of $35,000 are invested, with the first amount invested immediately. What interest table is appropriate for this situation?

(d) Jane Lindholm invests in a “jumbo” $200,000, 3-year certificate of deposit at ING Bank. What table would be used to determine the amount accumulated at the end of 3 years?

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Intermediate Accounting IFRS Edition

ISBN: 9781118443965

2nd Edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield

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