BMGT220 Week 6 homework solutions
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On October 1, 20X4, Farmer Engineering Services purchased a new laser surveying instrument. Farmer paid $5,000 down and executed the following promissory note: ……………………….
Examine the following items and prepare the current liabilities section of the Balance sheet for Annapolis Corporation as of December 31, 2007
The beginning of year accounts payable was $100,000. Purchases on trade accounts during the year were $650,000, and payments on account were $610,000.
The company incurs substantial costs for electricity to run its servers and air conditioning systems. As of December 31, 2007, it is estimated that $55,000 of electricity has been used, although the monthly billing for December has not yet been received.
Annapolis Corporation sells web hosting plans for as low as $25 per month. However, it requires its customers to prepay in 6-month increments. As of the end of the year, $375,000 had been collected for 2008 web hosting plans.
Web hosting services are subject to sales taxes, and Annapolis Corporation collected $65,000 during the year. All of these amounts have been remitted to taxing authorities, with the exception of $5,000 that is due to be paid in January, 2008.
The company has total bank loans of $1,500,000. This debt bears interest at 6%, payable monthly. As of December 31, 2007, all interest had been paid, with the exception of accrued interest for the last half of December.
The company's bank loans ($1,500,000) are all due on June 30, 2008. However, Annapolis Corporation has a firm lending agreement with the bank to renew and extend $1,000,000 of this amount on a 5-year basis. The company intends to exercise this renewal option, but is not yet sure about the final disposition of the remainder.
Present and Future Value
What is the...