Problem 2 Refer back to Problem #1. In addition to the installment loan, SCW issued $200,000...

Problem 2

Refer back to Problem #1. In addition to the installment loan, SCW issued $200,000 of 5-year, 7% bonds for $190,000 on January 1, 2023. Interest is paid semiannually on June 30 and December 31. SCW uses the straight-line method for amortizing bond discounts and premiums. SCW also had the following financial information during the life of the loan: earned cash revenue of $75,000 each year, paid cash operating expenses of $30,000 each year, purchased land in 2023 for $30,000, and purchased computer equipment in 2025 for $6,500 (estimated useful life of 5 years and salvage value of $600).

1. What is SCW’s net income for 2025?

2. What is SCW’s total assets for 2025?

3. What is the carrying value of SCW’s bonds in 2025?

4. What is SCW’s total liabilities for 2025?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

2. You are the loan department supervisor for the Pacific National Bank. The following installment loan...

2. You are the loan department supervisor for the Pacific National Bank. The following installment loan is being paid off early, and it is your task to calculate the rebate fraction, the finance charge rebate, and the payoff for each loan. Enter the rebate fraction in this form: numerator / denominator (e.g., 82/165). Do not round intermediate calculations. Round your answers for finance charge rebate and loan payoff to the nearest cent. Do not reduce to lowest terms. Amount Financed...

Refer to the Johnson Filtration problem introduced in this section. Suppose that in addition to information...

Refer to the Johnson Filtration problem introduced in this section. Suppose that in addition to information on the number of months since the machine was serviced and whether a mechanical or an electrical repair was necessary, the managers obtained a list showing which repairperson performed the service. The revised data follow. Repair Time in Hours Months Since Last Service Type of Repair Repairperson 2.9 2 Electrical Dave Newton 3.0 6 Mechanical Dave Newton 4.8 8 Electrical Bob Jones 1.8 3...

Refer to the Johnson Filtration problem introduced in this section. Suppose that in addition to information...

Refer to the Johnson Filtration problem introduced in this section. Suppose that in addition to information on the number of months since the machine was serviced and whether a mechanical or an electrical repair was necessary, the managers obtained a list showing which repairperson performed the service. The revised data follow. Use Excel Formula(Excel only) Repair Time in Hours Months Since Last Service Type of Repair Repairperson 2.9 2 Electrical Dave Newton 3.0 6 Mechanical Dave Newton 4.8 8 Electrical...

Refer back to Textbook Problem 17.5. Recast the financial statements for Green Valley into common size...

Refer back to Textbook Problem 17.5. Recast the financial statements for Green Valley into common size financial statements. Describe at least two advantages of a common size presentation of financial statements.

Refer back to Module 2, Managing Suppliers (Scenario) in Practice Operations. Based on their observations in...

Refer back to Module 2, Managing Suppliers (Scenario) in Practice Operations. Based on their observations in this scenario, and upon a careful review of the available literature, the student is to consider him or herself to be the Operations Manager of Kibby and Strand, the company in the scenario, responsible for managing all three departments: receiving, production, and shipping. Conduct an analysis of the way Kibby and Strand manages receiving, production, and shipping and prepare a supply chain management plan...

A banking institution has issued a 1 year loan commitment of $2 million for an upfront...

A banking institution has issued a 1 year loan commitment of $2 million for an upfront fee of 25 basis points. The back-end fee on the unused portion of the commitment is 10 basis points. The banking institution's cost of funds is 7%, and interest on the loan is 9%. The customer is expected to withdraw 60% of the commitment at the beginning of the year. What is the expected return on this loan? Discuss the take-down risk on the...

On January 1, 2019, Garner issued 10-year, $200,000

On January 1, 2019, Garner issued 10-year, $200,000 face value, 6% bonds at par. Each $1,000 bond is convertible into 30 shares of Garner $2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2020. (Ignore all tax effects.) Requirement 1: Accounting Prepare the journal entry Garner would have made on January 1, 2019,...

A bank has made a 1-year loan at 4%. To fund the loan, it issued a...

A bank has made a 1-year loan at 4%. To fund the loan, it issued a 6-month deposit at 2.5%. It also purchased a 6x12 FRA at 3%. On the settlement date of the contract, 6-month LIBOR is 5%, and the bank issues a 6-month deposit at LIBOR. What is the bank’s interest margin (spread), in %, for the first six months and for the next? 1.5% and 1.5% 1.5% and 1% 1.5% and −1% 1% and −1% 1% and...

3. Bond Problem: X Co. issued 7% bonds with a face value of $200,000. At time...

3. Bond Problem: X Co. issued 7% bonds with a face value of $200,000. At time of issue, the market interest rate for similar bonds was 8%. The bonds had a five-year life and paid interest annually (to keep the problem straightforward). At what price were the bonds issued. Record the entry for issuance. In class (or at home if you like), prepare a bond interest amortization schedule, using Excel.

On January 1, Gemstone Company obtained a $200,000, 10-year 9% installment note from Guarantee Bank. The...

On January 1, Gemstone Company obtained a $200,000, 10-year 9% installment note from Guarantee Bank. The note requires annual payments of $31,164, with the first payment occuring on the last day of the fiscal year. The first payment consists of interest of $18,000 and principal repayument of $13,164. The journal entry to record the payment of the first annual amount due on the note would include a Double-click on the box below to edit your answer choices. A.debit to cash...

Subjects