FUTURE VALUE OF A SINGLE CASH FLOW Shubert Products has just been paid $25,000 by Apex Enterprises,

Question:

FUTURE VALUE OF A SINGLE CASH FLOW Shubert Products has just been paid $25,000 by Apex Enterprises, which has owed Shubert this amount for 30 months but been unable to pay because of financial difficulties. Had it been able to invest this cash, Shubert assumes that it would have earned an interest rate of 12 percent compounded monthly (1 percent per month).

Required:

. Prepare a cash flow diagram for the investment that could have been made if Apex had paid 30 months ago.

. Determine how much Shubert has lost by not receiving the $25,000 when it was due 30 months ago.

. Indicate whether Shubert would make an entry to account for this loss. Why, or why not?

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Related Book For  book-img-for-question

Cornerstones Of Financial Accounting Current Trends Update

ISBN: 9781111527952

1st Edition

Authors: Jay Rich , Jeff Jones, Maryanne Mowen , Don Hansen

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