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Shkiper50 [21]
2 years ago
6

On January 1, 20X4, Parke Company borrowed $360,000 from a major customer evidenced by a non-interest bearing note due in three

years and Parke did not elect the fair value option. Parke agreed to supply the customer's inventory needs for the loan period at lower than market price. At the 12% imputed interest rate for this type of loan, the present value of the note is $255,000 at January 1, 20X4. What amount of interest expense should be included in Parke's 20X4 income statement
Business
1 answer:
Sonbull [250]2 years ago
5 0

Answer:

Parke Company

The amount of interest expense should be included in Parke's 20X4 income statement is:

= $30,600.

Explanation:

a) Data and Calculations:

3-year Non-interest bearing note payable = $360,000

Imputed interest rate for this type of loan = 12%

Present value of the loan = $255,000

Interest expense as of December 31, 20X4 = $30,600 ($255,000 * 12%)

b) The interest expense is based on the present value of the loan and not on the future value of the note payable.  Therefore, the interest expense for each of the three years will not be the same amount but will continue to increase as the present value changes from one year to the next.

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Answer:

Accounting costs $145,000

Implicit costs $75,000

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Explanation:

What her accounting cost will be during the first year of operation.

Based on the information given we were told that the annual overhead costs and operating expenses amounted to the amount of $145,000 which means that the amount of $145,000 will be the ACCOUNTING COSTS

Her IMPLICIT COSTS will be the amount of $75,000 which is the amount she earn in her current job per year.

Her OPPORTUNITY COSTS be the addition of both her Her accounting cost and implicit costs

Hence,

Opportunity cost=$145,000+$75,000

Opportunity cost=$220,000

4 0
1 year ago
Read the excerpt from “The Girl Who Silenced the World for Five Minutes.”
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Answer:

it's A.

Explanation:

I took the quiz on edge 2020

7 0
2 years ago
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During the 1990s positive technological change in the production of chicken caused the price of chicken to fall. Holding everyth
Marta_Voda [28]

Answer:

The demand for pork would decrease and the equilibrium price of pork would decrease.

Explanation:

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If the price of chicken falls, consumers would increase the quantity demanded of chicken and reduce their demand for pork. The fall in the demand for pork would lead to a leftward shift in the demand curve for pork. A leftward shift in the demand curve while the supply curve remains unchanged would lead to a fall in equilibrium price of pork.

I hope my answer helps you

5 0
2 years ago
The ______ is a security technique associated with the use of credit cards at the time of purchase that checks additional digits
gayaneshka [121]

Answer:

Card Verification Number

Explanation:

The card verification number is the additional code printed on the back of the debit or credit card. On most cards it is the last three digits printed on the signature strip located on the back of the card. On American Express (AMEX) cards, this is usually a four-digit code on the front of the card. Since this number is not embossed (like the card number), it is not printed on receipts, so it is unlikely that anyone, In addition to the actual cardholder, know him.

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Clementine Company makes skateboards. They prepare master and flexible budgets and then perform variance analysis after the budg
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Answer:

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