Question
Question 1. At the end of 2018, the Luck Company has $40,000 in accumulated depreciation and $100,000 in retained earnings. 2019 2020 Sales $250,000 $300,000
Question 1.
At the end of 2018, the Luck Company has $40,000 in accumulated depreciation and $100,000 in retained earnings.
2019 2020
Sales $250,000 $300,000
Notes Payable 20,000 50,000
Tax Rate 40% 40%
Gross Fixed Assets $500,000 $590,000
Total Current Liabilities 100,000 110,000
Interest Expense 30,000 35,000
Cash 20,000 30,000
Accounts Payable 30,000 20,000
COGS 30% of Sales 30% of Sales
Total Current Assets 100,000 150,000
Total Debt 200,000 240,000
Net Income 42,000 48,000
Accounts Receivable 30,000 20,000
Addition to Retained 20,000 26,000
Earnings
Complete the Balance Sheet and Income Statement for 2019 and 2020
-You deposit $30,000 today. If it grows to $60,000 in 10 years, what rate of interest must have your earned?
-Today is T=0. If you make five annual deposits into a bank account that pays interest at the rate of 9%, how large must the deposits be if the account is worth $75,000 at the end of the fifth year (T=5) and the first deposit is made today?
-You will start college on your 18th birthday. Your parents need $100,000 on that day. How much should they deposit into a bank account at the moment of your birth if the bank pays interest at the rate of 6%?
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