Question

NFT Consulting and Sales Inc Post Closing Trial Balance October 31, 2018 Cash $              304,900 Accounts Receivable                    76,580 Allowance for Uncollectible Accounts $                  5,690 Supplies                    56,500 Inventory                    68,596 Prepaid Insurance                    57,890 Land                  260,000 Building                  550,000 Accumulated Depr – Building                    25,650 Office Equipment                  856,850 Accumulated Depr – Office Equip                    22,500 Computer Equipment                  556,500 Accumulated Depr - Computer Equip                    10,250 Accounts Payable                    56,560 Utilities Payable                    16,850 Wages Payable                    58,950 Interest Payable                    25,000 Long term Note Payable                 390,000 Mortgage Payable                 406,800 Common Stock ($1 par, 1,000,000,                 400,000 shares authorized, 400,000 issued      and outstanding) Retained Earnings              1,369,566 $           2,787,816 $          2,787,816 PLANNED ASSET ACQUISITIONS Reminder that the company’s fiscal year is November 1 through October 31. Asset Cost Useful life Salvage Value Depreciation Method Purchase Date Land 100,000 N/A N/A N/A 1-Nov-18 Building 465,500 30 15,500 Straight line 1-Nov-18 Office Equipment 150,500 4 10,500 Straight line 1-Apr-19 Delivery Equipment 200,000 6 20,000 production 1-May-19 Additional information related to the $200,000 delivery equipment purchase: It is ESTIMATED that the equipment will be ABLE TO DRIVE 150,000 total miles over its lifetime. To complete the depreciation schedule, PRESUME that the actual miles driven for its useful life are as indicated below. Also, round depreciation expense per unit to the nearest cent and depreciation expense to the nearest dollar. Year 1      12,560 Year 2      32,560 Year 3      31,650 Year 4      29,850 Year 5      26,500 Year 6      22,350 155,470 NFT Consulting and Sales Inc
Cash Received/Annual Cash Payment Requirement
The company could issue $2,000,000 of long-term bonds, due in 5 years with a stated rate of interest, paid semiannually, of 4%. The market rate for similar debt is 6%.
	Cash Received				Annual Cash Required
	Face amount
	Face rate
	Interest Payment periods
	Interest Payment
	Term
	Periods
	Market rate
	PV factors used		single sum
			annuity
	PV face
	PV interest
The company could issue $1,500,000 of long-term bonds, due in 4 years with a stated rate of interest, paid semiannually, of 8%. The market rate for similar debt is 6%.
	Cash Received				Annual Cash Required
	Face amount
	Face rate
	Interest Payment periods
	Interest Payment
	Term
	Market rate
	PV factors used		single sum
			annuity
	PV face
	PV interest
The company could issue 400,000 additional shares of $1 par value common stock for $4 per share The company will begin paying a dividend to ALL the common shareholders of $0.12 per share and this will continue into the future.
	Cash Received				Annual Cash Required
	number of existing shares
	number of new shares
	total shares at year end
	market price
	Dividend rate
	Dividend period
	PIC year end
	PIC > par year end PARTIAL BALANCE SHEETS The company could issue $2,000,000 of long-term bonds, due in 4 years with a stated rate of interest, paid semiannually, of 4%. The market rate for similar debt is 6%. The company could issue $1,500,000 of long-term bonds, due in 4 years with a stated rate of interest, paid semiannually, of 8%. The market rate for similar debt is 6%. The company could issue 400,000 additional shares of $1 par value common stock for $4 per share The company will begin paying a dividend to ALL the common shareholders of $0.12 per share and this will continue into the future.

Answer 1