Neosho River Resort, Inc. opened for business on June 1 with eight air-conditioned units.

Neosho River Resort, Inc. opened for business on June 1 with eight air-conditioned units. Its trial balance before adjustment on August 31 is as follows. NEOSHO RIVER RESORT, INC. Trial Balance August 31, 2008 Account Number Debit Credit 101 Cash $ 19,600 126 Supplies 3,300 130 Prepaid Insurance 6,000 140 Land 25,000 143 Cottages 125,000 149 Furniture 26,000 201 Accounts Payable $ 6,500 208 Unearned Rent 7,400 275 Mortgage Payable 80,000 311 Common Stock 100,000 332 Dividends 5,000 429 Rent Revenue 80,000 622 Repair Expense 3,600 726 Salaries Expense 51,000 732 Utilities Expense 9,400 $273,900 $273,900 In addition to those accounts listed on the trial balance, the chart of accounts for Neosho River Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 144 Accumulated Depreciation—Cottages, No. 150 Accumulated Depreciation—Furniture, No. 212 Salaries Payable,No. 230 Interest Payable,No. 320 Retained Earnings,No. 620 Depreciation Expense—Cottages, No. 621 Depreciation Expense—Furniture, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense. Other data: 1. Insurance expires at the rate of $400 per month. 2. A count on August 31 shows $600 of supplies on hand. 3. Annual depreciation is $6,000 on cottages and $2,400 on furniture. 4. Unearned rent of $4,100 was earned prior to August 31. 5. Salaries of $400 were unpaid at August 31. 6. Rentals of $1,000 were due from tenants at August 31. (Use Accounts Receivable.) 7. The mortgage interest rate is 9% per year. (The mortgage was taken out on August 1.) Instructions (a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31. (b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.) (c) Prepare an adjusted trial balance on August 31. (d) Prepare an income statement and a retained earnings statement for the 3 months ending August 31 and a balance sheet as of August 31

  

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Compute the present value of a $150 cash flow for the following combinations of discount rates and times: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Compute the present value of a $150 cash flow for the following combinations of discount rates and times: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Present Value
a. r = 12%, t = 8 years	$
b. r = 12%, t = 16 years
c. r = 6%, t = 8 years
d. r = 6%, t = 16 years

Explanation:

a. $150/(1.12)8 = $60.58

b. $150/(1.12)16 = $24.47

c. $150/(1.06)8 = $94.11

d. $150/(1.06)16 = $59.05

Compute the future value of a $150 cash flow for the same combinations of rates and times: (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Future Value
a. r = 12%, t = 8 years	$
b. r = 12%, t = 16 years
c. r = 6%, t = 8 years
d. r = 6%, t = 16 years

Explanation:

a. $150 × (1.12)8 = $371.39

b. $150 × (1.12)16 = $919.56

c. $150 × (1.06)8 = $239.08

d. $150 × (1.06)16 = $381.05

In 1880 five aboriginal trackers were each promised the equivalent of 100 Australian dollars for helping to capture the notorious outlaw Ned Kelley. In 1994 the granddaughters of two of the trackers claimed that this reward had not been paid. The Victorian prime minister stated that if this was true, the government would be happy to pay the $100. However, the granddaughters also claimed that they were entitled to compound interest.

a.	How much was each entitled to if the interest rate was 3%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Future value

$

b.	How much was each entitled to if the interest rate was 6%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Future value

$

Explanation:

a.

$100 × (1.03)114 = $2,906.99

b.

$100 × (1.06)114 = $76,712.94

a-1.	Calculate the present value of an annual payment of $900 you would received for 12 years if the interest rate is 3%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

a-2.	Calculate the present value of an annual payment of $700 you would received for 17 years if the interest rate is 3%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

a-3.	Which option would you prefer?
	$700 a year for 17 years

b-1.	Calculate the present value of an annual payment of $900 you would received for 12 years if the interest rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

b-2.	Calculate the present value of an annual payment of $700 you would received for 17 years if the interest rate is 12%. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

b-3.	Which option would you prefer?
	$900 a year for 12 years

rev: 01_28_2012


Explanation:

You should compare the present values of the two annuities.

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Tips for Effective Study

Tips for Effective Study

Do you know how to organize and regulate the study time? Do you know how to squeeze everything from  that time you spend reading you spend reading the several books. This section contains some valuable hits about the “how and why” of studying. Learn the hints and use them; you’ll be pleasantly surprised with upgraded study efficiency.

 

A DEFINITE TIME

Set a specific time in your daily schedule, which shall be known and observed as you official study period. Also set a minimum and realistic maximum amount of time to be spent in study. Deeply observe these limits.

You can never truthfully say that the teacher didn’t make a specific assignment for next class, so there is not much to study. If there is no assignment for the following class meeting use your study time for a good review. Then you won’t have to cram your next big test.

You can’t afford to allow non-study activities to take any part of your study period. Tell your friends not to call or come by for a visit during your study hours. Don’t receive telephone; leave instructions that you are not home.

How much time you will need? You’ll be able to determine this shortly after your short courses. Of course, the total time you will need will be determined by the number and type of courses and your own study efficiency. However, the college catalogs mention the fact that one semester’s credit should require two hours of preparation weekly. This means that a three hour course should get six hours of outside study each week.

A DEFINITE PLACE

Where should you study? Any place- a desk in your room, a kitchen table where you can be reasonably comfortable and away from the main stream of activity in your home office or dormitory, Get away from the television set, children and home mates.

It is important that the spot you select be one which you normally do not use expect for study. If it’s the table where you play cards, it’s very easy to think about the last game there rather than about what you’re trying to study.

STUDY PROPS

You use specific item for a bath-soap, towels, etc. as a matter of fact, if you don’t use the right things, your bath won’t be good one same is true for study. Use a desk or table of adequate size and height. And time is most important thing, clear it of everything expect the actual books or materials you require to study properly that one particular subject you are working on. You can’t concentrate very well on writing for English class if you have in front of you a math book with 20 problems awaiting for you, and half a dozen other tasks and assignments. Work and worry only about what you have inform of your at the moment. The other subjects can be taken care giving it your full attention.

Sit in a straight chair, not one which is too comfortable-unless you plan to snooze.

LIGHT AND TEMPERATURE

Have a good light on your desk. The rest of the other room should be lighted very softly. With a soft light in the background, distant object-paintings, wallpaper, statues, etc-won’t have too much chance of stealing your attention.

The temperature should be a degree or so cooler than normal. You likely will become sleepy if the room is too warm. Arrange for some fresh air circulation if possible.

DURATION OF STUDY

How long can you study effectively in one sitting? It depends on many factors, but is relatively safe to say that 30 to 45 minutes is about the maximum you can study without taking a break, whether scheduled or not. So, it is wise to schedule a five-minute break about every half to three quarter hour.

When you do break, get completely away from you work, both physically and mentally. Take a walk through or around the house. Get a drink of water or a glass of milk. Reward yourself.

After five minutes, you’ll return to your study mentally and physically refreshed. This study break habit can enable you to study for longer periods of time with the minimum amount of fatigue and maximum efficiency. For study just try it and see the difference.

Answer the following questions. (Hint: Use the accounting equation.) (Omit the "$" sign in your response.) a. Office Mart has assets equal to $123,000 and liabilities equal to $53,000 at year-end. What is the total equity for Office Mart at year-end?

Answer the following questions. (Hint: Use the accounting equation.) (Omit the "$" sign in your response.)

a.	Office Mart has assets equal to $123,000 and liabilities equal to $53,000 at year-end. What is the total equity for Office Mart at year-end?

  

Total equity

$

Explanation:

Assets	=	Liabilities	+	Equity
$123,000	=	$53,000	+	$70,000

When Patey Pontoons issued 7.00% bonds on January 1, 2011, with a face amount of $490,000, the market yield for bonds of similar risk and maturity was 8.00%. The bonds mature December 31, 2014 (4 years). Interest is paid semiannually on June 30 and December 31. (Use Table 2 and Table 4) Required:

When Patey Pontoons issued 7.00% bonds on January 1, 2011, with a face amount of $490,000, the

market yield for bonds of similar risk and maturity was 8.00%. The bonds mature December 31, 2014 (4

years). Interest is paid semiannually on June 30 and December 31. (Use Table 2 and Table 4)

Required:

(1) Determine the price of the bonds at January 1, 2011. (Do not round PV factors. Round final answer

to the nearest dollar amount. Omit the "$" sign in your response.)

Price of the bonds $ 473,505

(2) Prepare the journal entry to record their issuance by Patey on January 1, 2011. (Do not round PV

factors. Round final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Date General Journal Debit Credit

Jan. 1 Cash 473,505

Discount on bonds 16,495

Bonds payable 490,000

(3) Prepare an amortization schedule that determines interest at the effective rate each period. (Do not

round PV factors. Round final answer to the nearest dollar amount. Omit the "$" sign in your

response.)

Cash Effective Increase in Outstanding

Payment Interest Balance Balance

473,505

1 17,150 18,940 1,790 475,295

2 17,150 19,012 1,862 477,157

3 17,150 19,086 1,936 479,093

4 17,150 19,164 2,014 481,107

5 17,150 19,244 2,094 483,201

6 17,150 19,328 2,178 485,379

7 17,150 19,415 2,265 487,644

8 17,150 19,506 2,356 490,000

137,200 153,695 16,495

(4) Prepare the journal entry to record interest on June 30, 2011. (Do not round PV factors. Round final

answer to the nearest dollar amount. Omit the "$" sign in your response.)

Date General Journal Debit Credit

June 30 Interest expense 18,940

Discount on bonds payable 1,790

Cash 17,150

(5) What is the amount related to the bonds that Patey will report in its balance sheet at December 31,

2011? (Do not round PV factors. Round final answer to the nearest dollar amount. Omit the "$"

sign in your response.)

December 31, 2011 net liability $ 477,157

(6) What is the amount related to the bonds that Patey will report in its income statement for the year

ended December 31, 2011? (Ignore income taxes.) (Do not round PV factors. Round final answer to

the nearest dollar amount. Omit the "$" sign in your response.)

Interest expense for 2011 $ 37,952

(7) Prepare the appropriate journal entries at maturity on December 31, 2014. (Do not round PV factors.

Round final answer to the nearest dollar amount. Omit the "$" sign in your response.)

Date General Journal Debit Credit

Dec. 31 Interest expense 19,506

Discount on bonds payable 2,356

Cash 17,150

Dec. 31 Bonds payable 490,000

Cash 490,000

rev: 12_13_2011

Explanation:

(1)

Price of the bonds at January 1, 2011

Interest $17,150¥× 6.73274* = $ 115,467

Principal $490,000× 0.73069** = 358,038

Present value (price) of the bonds $ 473,505

¥ 3.500% × $490,000

*present value of an ordinary annuity of $1: n = 8, i = 4.000% (Table 4)

**present value of $1: n = 8, i = 4.000% (Table 2)

(3)

Cash

Payment

Effective

Interest

Increase in

Balance

Outstanding

Balance

3.500% × Face

Amount 4.000% × Outstanding Balance Discount

Reduction

473,505

1 17,150 0.040 (473,505) = 18,940 1,790 475,295

2 17,150 0.040 (475,295) = 19,012 1,862 477,157

3 17,150 0.040 (477,157) = 19,086 1,936 479,093

4 17,150 0.040 (479,093) = 19,164 2,014 481,107

5 17,150 0.040 (481,107) = 19,244 2,094 483,201

17,150 0.040 (483,201) = 19,328 2,178 485,379

7 17,150 0.040 (485,379) = 19,415 2,265 487,644

8 17,150 0.040 (487,644) = 19,506* 2,356 490,000

137,200 153,695 16,495

*rounded

(4)

Interest expense (4.000% × $473,505) = 18,940

Cash (3.500% × $490,000) = 17,150

(5)

Bonds payable $ 490,000

Less: discount (16,495)

Initial balance, January 1, 2011 $ 473,505

June 30, 2011 discount amortization 1,790

Dec. 31, 2011 discount amortization 1,862

December 31, 2011 net liability $ 477,157

(6)

June 30, 2011 interest expense $ 18,940

Dec. 31, 2011 interest expense 19,012

Interest expense for 2011 $ 37,952

(7)

Interest expense (4.000% × 487,644) = 19,506*

* rounded value from amortization schedule

Cash (3.500% × $490,000) = 17,150

National