Toduction to Pe. EC290 Textbook EC295 EC281 BU225 Midterm 2 BU283 issued for Assignment 1 pers. are the bonds not QUESTION TWO (12 marks) the Part 1(6 Marks) Selling pace? Routst Ltd. is a publicly accountable company that manufactures high precision ball bearings. The company has decided to move forward with the construction of a new plant to meet increased demand Financing of the expansion will done through the issuance of St million of 10 year corporate bonds on March 1, 2020, due on March 1, 2030, with interest payable cach March 1 and September 1. At the time of issuance, the market interest rate for similar bonds is 8%. 1010 REQUIRED 2. Determine the selling price of the bonds on March 1, 2020. Show calculations. (Present value tables are attached). (2 marks) 4 000 000 - (14 005) (PV) PV=1.507 567 1 b. Provide all journal entries required to be recorded by Routst for March 1, 2020 and September 2020. (4 marks) Mor | 2020 1 Cash 1 507 557 Bonds gay 1507 557 | Seot i 2020 387 fall 2016.pdf doc (1).pdf HR-QUIZ-TB-1.pdf Chapter 2 dl MacBook Air 30 F9 888 * 1 24 od FY DO VR & 7 +00 8 9 0 F TI 0 R T Y ASI wi NY ch ch ch w W! M Bo E ECZ OV #inbox/FMtogGzOCfbmRRIKWqibsp projector 18message Partid=0:1 Introduction to Pe EC200 Textbook EC295 EC281 BU225 | Assignment 1 pers Midterm 2 20283 Part 2 (6 marks) Care Industries would like to determine the fair value of its manufacturing facility in London, Ontario Assume that the manufacturing facility is highly specialized and is unique to Cure Industries. REQUIRED (6 marks) (a) List and briefly describe the three levels of input in the fair value hierarchy under IFRS 13 (approximately one sentence cach) Present volve - This is calculation berca! off predicted future Cashflows in order to value Un the facilities 15 valuation based Historic Cost - This Off what Market value Similor ossens mocket drie foolly cured. comodring the ower to chod Are Volved of (b) For each of the 3 input levels that you described in part(s), briefly describe whether it would be the appropriate to use it to value the manufacturing facility under IFRS 13 (that is why or why not it should be used). (Approximately se sentence each) Present venue - Could be usefull depending on her well the furthe flows .com be predicted Historic Cost osset hosn't Page 4/10 voive of the Q + Co much 1/- / Buatl 2016 pdt doci pot QUIZ T3.1.0 odt Chapter 7 dit MacBook Air 888 80 3 . 00 Y D bo : F . $ 4 ) 3 % 5 A 6 & 7 C 9 8 0 003 Toduction to Pe. EC290 Textbook EC295 EC281 BU225 Midterm 2 BU283 issued for Assignment 1 pers. are the bonds not QUESTION TWO (12 marks) the Part 1(6 Marks) Selling pace? Routst Ltd. is a publicly accountable company that manufactures high precision ball bearings. The company has decided to move forward with the construction of a new plant to meet increased demand Financing of the expansion will done through the issuance of St million of 10 year corporate bonds on March 1, 2020, due on March 1, 2030, with interest payable cach March 1 and September 1. At the time of issuance, the market interest rate for similar bonds is 8%. 1010 REQUIRED 2. Determine the selling price of the bonds on March 1, 2020. Show calculations. (Present value tables are attached). (2 marks) 4 000 000 - (14 005) (PV) PV=1.507 567 1 b. Provide all journal entries required to be recorded by Routst for March 1, 2020 and September 2020. (4 marks) Mor | 2020 1 Cash 1 507 557 Bonds gay 1507 557 | Seot i 2020 387 fall 2016.pdf doc (1).pdf HR-QUIZ-TB-1.pdf Chapter 2 dl MacBook Air 30 F9 888 * 1 24 od FY DO VR & 7 +00 8 9 0 F TI 0 R T Y ASI wi NY ch ch ch w W! M Bo E ECZ OV #inbox/FMtogGzOCfbmRRIKWqibsp projector 18message Partid=0:1 Introduction to Pe EC200 Textbook EC295 EC281 BU225 | Assignment 1 pers Midterm 2 20283 Part 2 (6 marks) Care Industries would like to determine the fair value of its manufacturing facility in London, Ontario Assume that the manufacturing facility is highly specialized and is unique to Cure Industries. REQUIRED (6 marks) (a) List and briefly describe the three levels of input in the fair value hierarchy under IFRS 13 (approximately one sentence cach) Present volve - This is calculation berca! off predicted future Cashflows in order to value Un the facilities 15 valuation based Historic Cost - This Off what Market value Similor ossens mocket drie foolly cured. comodring the ower to chod Are Volved of (b) For each of the 3 input levels that you described in part(s), briefly describe whether it would be the appropriate to use it to value the manufacturing facility under IFRS 13 (that is why or why not it should be used). (Approximately se sentence each) Present venue - Could be usefull depending on her well the furthe flows .com be predicted Historic Cost osset hosn't Page 4/10 voive of the Q + Co much 1/- / Buatl 2016 pdt doci pot QUIZ T3.1.0 odt Chapter 7 dit MacBook Air 888 80 3 . 00 Y D bo : F . $ 4 ) 3 % 5 A 6 & 7 C 9 8 0 003
