$468
Step-by-step explanation:
I = P*R*T
I = 300*0.04*14
I = 168
168 + 300 = 468
$468
Step-by-step explanation:
I = P*R*T
I = 300*0.04*14
I = 168
168 + 300 = 468
a) Interest = $980
b) Principal = $7250
c) Interest rate = 3%
Step-by-step explanation:
a) For Alex
How much interest (in dollars) will Alex receive after 2 years if he deposited $14,000 in the bank at 3.5% annual interest rate?
The formula for Simple Interest = PRT
Where
P = Principal = $14,000
R = Interest rate = 3.5% = 0.035
T = Time = 2 years
I = $14,000 × 0.035 × 2
I = $980
b) For Davit
Davit received $870 as an interest for money invested in Foreign Exchange Market three years ago. How much money did he invest, if the annual interest was 4%
The formula for Simple Interest = PRT
Where
P = Principal = ?
R = Interest rate = 4% = 0.04
I = $870
T = 3 years
years
Solving for P
P = I/RT
P = $870/0.04 × 3
P = $870/0.12
P = $7250
c) For Arthur
. For starting a new business, Arthur borrowed $23000 and calculated $3450 interest for five years. What annual interest was considered?
The formula for Simple Interest = PRT
Where
P = Principal = $23,000
R = Interest rate = ?
I = $3450
T = 5 years
years
We are Solving for R
R = I/PT
R = $3450/$23,000× 5
R = 3450/115000
R = 0.03
Converting to percentage
= 0.03 × 100
= 3%
a) Interest = $980
b) Principal = $7250
c) Interest rate = 3%
Step-by-step explanation:
a) For Alex
How much interest (in dollars) will Alex receive after 2 years if he deposited $14,000 in the bank at 3.5% annual interest rate?
The formula for Simple Interest = PRT
Where
P = Principal = $14,000
R = Interest rate = 3.5% = 0.035
T = Time = 2 years
I = $14,000 × 0.035 × 2
I = $980
b) For Davit
Davit received $870 as an interest for money invested in Foreign Exchange Market three years ago. How much money did he invest, if the annual interest was 4%
The formula for Simple Interest = PRT
Where
P = Principal = ?
R = Interest rate = 4% = 0.04
I = $870
T = 3 years
years
Solving for P
P = I/RT
P = $870/0.04 × 3
P = $870/0.12
P = $7250
c) For Arthur
. For starting a new business, Arthur borrowed $23000 and calculated $3450 interest for five years. What annual interest was considered?
The formula for Simple Interest = PRT
Where
P = Principal = $23,000
R = Interest rate = ?
I = $3450
T = 5 years
years
We are Solving for R
R = I/PT
R = $3450/$23,000× 5
R = 3450/115000
R = 0.03
Converting to percentage
= 0.03 × 100
= 3%
C. $144,200
Step-by-step explanation:
We have been given that a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 7.3% is $877.
To find the loan amount, we will use simple interest formula.
, where,
I = Amount of interest,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
One month will be equal to 1/12 year.
Upon substituting our given values in simple interest formula, we will get:
Upon rounding to nearest hundred, we will get:
Therefore, the loan amount was $144,200 and option C is the correct choice.
C. $144,200
Step-by-step explanation:
We have been given that a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 7.3% is $877.
To find the loan amount, we will use simple interest formula.
, where,
I = Amount of interest,
P = Principal amount,
r = Annual interest rate in decimal form,
t = Time in years.
One month will be equal to 1/12 year.
Upon substituting our given values in simple interest formula, we will get:
Upon rounding to nearest hundred, we will get:
Therefore, the loan amount was $144,200 and option C is the correct choice.
Gig Harbor Boating
Budgeted Income Statement using absorption costing format:
Sales Revenue $985,000
Cost of Boats Sold 730,000
Gross profit $255,000
Total variable selling and
administrative expenses $25,000
Fixed selling and
administrative expenses (per year) 196,000 $221,000
Income before interest and taxes $34,000
Interest expense for the year 13,000
Pretax Income $21,000
2. Down Under Products, Ltd. of Australia
Production Budget for the second quarter
April May June Total
Sales in Units 74,000 85,000 114,000 273,000
Ending Inventory 8,500 11,400 9,200 9,200
Beginning Inventory 740 8,500 11,400 740
Units to be produced 81,760 87,900 111,800 241,460
3. Garden Depot
Summary of Cash Budget for the upcoming fiscal year:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Beginning cash bal. $25,000 $10,000 $63,800 $98,800
Total cash receipts $310,000 $430,000 $360,000 $380,000
Total cash available $335,000 $440,000 $423,800 $478,800
Total cash
disbursements ($365,000) ($335,000) ($325,000) ($345,000)
Bank loan (repyt) 40,000 (40,000)
Bank loan Interest (1,200)
Cash Balance ($30,000) $63,800 $98,800 $133,800
Required Minimum $10,000 $10,000 $10,000 $10,000
4. Mecca Copy
Budgeted Balance Sheet for the coming year:
Budgeted Balance Sheet for the next year:
Ending Balances
Cash $ 18,200
Accounts receivable $ 8,500
Supplies inventory $ 4,700
Equipment $ 36,000
Accumulated depreciation $ 14,600 $ 21,400
Total Assets $ 52,800
Accounts payable $ 2,200
Common stock $ 5,000
Retained earnings $ 45,600
Total Liabilities and Equity $ 52,800
Explanation:
1. Gig Harbor Boating:
Data and Calculations:
Budgeted unit sales 500
Selling price per unit $1,970
Sales Revenue = $985,000 ($1,970 x 500)
Cost per unit $1,460
Cost of Boats Sold = $730,000 ($1,460 x 500)
Variable selling and administrative expenses (per unit) $ 50
Total variable selling and administrative expenses = $25,000 ($50 x 500 )
Fixed selling and administrative expenses (per year) $196,000
Interest expense for the year $ 13,000
2. Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
a) Data and Calculations:
March April May June July
Sales in Units 7,400 74,000 85,000 114,000 92,000
Ending Inventory 740 8,500 11,400 9,200
Beginning Inventory 740 8,500 11,400 9,200
Units to be produced 81,760 87,900 111,800
3. Garden Depot
Data and Calculations:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Beginning cash bal. $25,000 $10,000 $63,800 $98,800
Total cash receipts $310,000 $430,000 $360,000 $380,000
Total cash available $335,000 $440,000 $423,800 $478,800
Total cash
disbursements ($365,000) ($335,000) ($325,000) ($345,000)
Bank loan (repyt) 40,000 (40,000)
Bank loan Interest (1,200)
Cash Balance ($30,000) $63,800 $98,800 $133,800
Required Minimum $10,000 $10,000 $10,000 $10,000
4. Mecca Copy:
Data and Calculations:
Budgeted Balance Sheet for the next year:
Ending Balances
Cash ?
Accounts receivable $ 8,500
Supplies inventory $ 4,700
Equipment $ 36,000
Accumulated depreciation $ 14,600
Accounts payable $ 2,200
Common stock $ 5,000
Retained earnings ?
Retained Earnings:
Beginning = $32,000
Net income = 16,300
Dividends = (2,700)
Ending = $45,600
Gig Harbor Boating's budgeted income statement gives a snapshot into the future of its revenue, cost of boats sold, gross profit, and pretax income. Thus, it uses the projections to guide management towards the achievement of its targets.
Similarly, Down Under Products, Ltd. of Australia prepares a production budget for the second quarter to determine how much units it needs to produce to meet sales or customers' demand.
Garden Depot, as a retailer, ascertains its cash needs by preparing budgeted cash flows for the coming year.
Finally, Mecca Copy cannot operate its center without an idea about its financial position for the next year. Therefore, it prepares a budgeted balance sheet. All these budgets guide managements of these various entities and prepare them for taking necessary actions to plan and keep their companies afloat.
Gig Harbor Boating
Budgeted Income Statement using absorption costing format:
Sales Revenue $985,000
Cost of Boats Sold 730,000
Gross profit $255,000
Total variable selling and
administrative expenses $25,000
Fixed selling and
administrative expenses (per year) 196,000 $221,000
Income before interest and taxes $34,000
Interest expense for the year 13,000
Pretax Income $21,000
2. Down Under Products, Ltd. of Australia
Production Budget for the second quarter
April May June Total
Sales in Units 74,000 85,000 114,000 273,000
Ending Inventory 8,500 11,400 9,200 9,200
Beginning Inventory 740 8,500 11,400 740
Units to be produced 81,760 87,900 111,800 241,460
3. Garden Depot
Summary of Cash Budget for the upcoming fiscal year:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Beginning cash bal. $25,000 $10,000 $63,800 $98,800
Total cash receipts $310,000 $430,000 $360,000 $380,000
Total cash available $335,000 $440,000 $423,800 $478,800
Total cash
disbursements ($365,000) ($335,000) ($325,000) ($345,000)
Bank loan (repyt) 40,000 (40,000)
Bank loan Interest (1,200)
Cash Balance ($30,000) $63,800 $98,800 $133,800
Required Minimum $10,000 $10,000 $10,000 $10,000
4. Mecca Copy
Budgeted Balance Sheet for the coming year:
Budgeted Balance Sheet for the next year:
Ending Balances
Cash $ 18,200
Accounts receivable $ 8,500
Supplies inventory $ 4,700
Equipment $ 36,000
Accumulated depreciation $ 14,600 $ 21,400
Total Assets $ 52,800
Accounts payable $ 2,200
Common stock $ 5,000
Retained earnings $ 45,600
Total Liabilities and Equity $ 52,800
Explanation:
1. Gig Harbor Boating:
Data and Calculations:
Budgeted unit sales 500
Selling price per unit $1,970
Sales Revenue = $985,000 ($1,970 x 500)
Cost per unit $1,460
Cost of Boats Sold = $730,000 ($1,460 x 500)
Variable selling and administrative expenses (per unit) $ 50
Total variable selling and administrative expenses = $25,000 ($50 x 500 )
Fixed selling and administrative expenses (per year) $196,000
Interest expense for the year $ 13,000
2. Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows:
a) Data and Calculations:
March April May June July
Sales in Units 7,400 74,000 85,000 114,000 92,000
Ending Inventory 740 8,500 11,400 9,200
Beginning Inventory 740 8,500 11,400 9,200
Units to be produced 81,760 87,900 111,800
3. Garden Depot
Data and Calculations:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Beginning cash bal. $25,000 $10,000 $63,800 $98,800
Total cash receipts $310,000 $430,000 $360,000 $380,000
Total cash available $335,000 $440,000 $423,800 $478,800
Total cash
disbursements ($365,000) ($335,000) ($325,000) ($345,000)
Bank loan (repyt) 40,000 (40,000)
Bank loan Interest (1,200)
Cash Balance ($30,000) $63,800 $98,800 $133,800
Required Minimum $10,000 $10,000 $10,000 $10,000
4. Mecca Copy:
Data and Calculations:
Budgeted Balance Sheet for the next year:
Ending Balances
Cash ?
Accounts receivable $ 8,500
Supplies inventory $ 4,700
Equipment $ 36,000
Accumulated depreciation $ 14,600
Accounts payable $ 2,200
Common stock $ 5,000
Retained earnings ?
Retained Earnings:
Beginning = $32,000
Net income = 16,300
Dividends = (2,700)
Ending = $45,600
Gig Harbor Boating's budgeted income statement gives a snapshot into the future of its revenue, cost of boats sold, gross profit, and pretax income. Thus, it uses the projections to guide management towards the achievement of its targets.
Similarly, Down Under Products, Ltd. of Australia prepares a production budget for the second quarter to determine how much units it needs to produce to meet sales or customers' demand.
Garden Depot, as a retailer, ascertains its cash needs by preparing budgeted cash flows for the coming year.
Finally, Mecca Copy cannot operate its center without an idea about its financial position for the next year. Therefore, it prepares a budgeted balance sheet. All these budgets guide managements of these various entities and prepare them for taking necessary actions to plan and keep their companies afloat.
$ 170
Explanation:
Opportunity cost in the value of the missed alternative. It is the foregone benefit as a result of choosing one item over another. In the case of John, the opportunity cost is the interest receivable forfeited as a result of engaging in the lawn moving business.
The interest missed include :
1. 3 percent interest on $ 1000 savings
= 3/100 x 1000= $ 30
7 percent interest on $ 2000 on loan
= 7/100 x 2000= $ 140
Total opportunity cost = $30 + $ 140
= $ 170
$ 170
Explanation:
Opportunity cost in the value of the missed alternative. It is the foregone benefit as a result of choosing one item over another. In the case of John, the opportunity cost is the interest receivable forfeited as a result of engaging in the lawn moving business.
The interest missed include :
1. 3 percent interest on $ 1000 savings
= 3/100 x 1000= $ 30
7 percent interest on $ 2000 on loan
= 7/100 x 2000= $ 140
Total opportunity cost = $30 + $ 140
= $ 170
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