Exercise 1: On February 1, Electrical Warehouse Co. issued a document to 45 days with a face value of $ 70,000 for Yamura Products Co. for cash loan.
a) Calculate paper products under the assumption that carries an interest rate of 10%.
b) Determine the document outputs on the assumption that discounted at a rate of
Exercise 2: I-Xtermination Co. sold $15,000 annual subscriptions Ruppert World for $50 each during December 2015. These new subscribers will receive monthly numbers from January 2016. In addition, the business had taxable income of $400,000 during the first calendar quarter of 2016 . the federal tax rate is 40%. quarterly tax payment will be made on April 7, 2016.
a) Develop section Current liabilities balance sheet for Xtermination Co. on March 31, 2016.
Exercise 3: A borrower has two alternatives to a loan: 1) issue a document for $240,000, 60 days at a rate of 8%; or 2) issue a document by $240,000, and 60 days, the creditor deducts 8%.
a) Calculate the amount of interest expense of each option.
b) Determine the products that receive the borrower in every situation.
c) What alternative is more favorable to the borrower? Explain.