bigchungus69
06.05.2020 •
Business
On January 1, 2019, Tonika Company issued a seven-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,479 based on an 8% effective interest rate. Tonika uses the effective-interest amortization method. The December 31, 2020 book value after the December 31, 2020 interest payment was made is closest to:
a.$668.
b.$763.
c.$664.
d.$700.
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Ответ:
b. $763
Explanation:
Tonika Company will pay interest amount of $763 for the year December 31, 2020. The carrying value of bond = $9479 and discount amortized in 2019 is 521. The interest expense for the year 2020 will be calculated using the effective interest rate. The effective interest rate is the real rate of interest payment after incorporating the compounding effect. The interest payment using the effective interest rate is $763 ($9,479 * 8%)
Ответ:
The correct answer is number "2": False.
Explanation:
According to the case:
Units on hand: 20Units planned for sale: 100Units desired as pending inventory: 10Units planned for purchase: xThus,
Total inventory = Units planned for sale + Units desired as pending inventory
Total inventory = 100 + 10
Total inventory = 110 units
So,
Units planned for purchase = Total inventory - Units on hand
Units planned for purchase = 110 - 20
Units planned for purchase = 90 units
The company should plan to purchase 90 units.