1) A company purchased two new delivery vans for a total of $250,000 on January 1,
Year 1. The company paid $40,000 cash and signed a $210,000, 3-year, 8% note for the
remaining balance. The note is to be paid in three annual end-of-year payments of
$81,487 each, with the first payment on December 31, Year 1. Each payment includes
interest on the unpaid balance plus principal.
(1) Prepare a note amortization table using the format below:
(2) Prepare the journal entries to record the purchase of the vans on January 1, Year 1
and the second annual installment payment on December 31, Year 2.
2) ____________ are the increases in equity from a company’s sales of products and
services to customers.
3) What is a hybrid costing system? When is a hybrid costing system appropriate for a
manufacturer?
4) Explain the use of a spreadsheet in the preparation of the statement of cash flows.
5) Use the following data to determine the company’s cash disbursements for August
and September:
6) In using a capital budgeting method that takes the time value of money into
consideration, management must consider a hurdle rate in making its decisions. What is
a hurdle rate? What factors does management have to consider in selecting a hurdle
rate?
7) The depreciation method that charges a varying amount to expense for each period of
an asset’s useful life depending on its usage is ________________________________.
8) The cash flow on total assets ratio is computed by dividing _____________ by
____________.