Riverbed Corporation builds in-home theater systems. Riverbed’s business is growing quickly. Therefore, the CEO, Paul Riverbed, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below. 1. The first truck’s list price is $21,420. Riverbed exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $13,260. Riverbed normally sells the equipment for $20,145. Riverbed uses a perpetual inventory system. 2. The second truck has a list price of $22,440. Riverbed makes a down payment of $5,100 cash on this truck and signs a zero-interest-bearing note with a face amount of $17,340. Payment of the note is due September 20, 2018. Riverbed would normally have to pay interest at a rate of 8% for such a borrowing. 3. The list price of the third truck is $19,584. This truck is acquired in exchange for 1,224 shares of common stock in Riverbed Corporation. The stock has a par value per share of $12 and a market price of $14 per share.
Riverbed Corporation builds in-home theater systems. Riverbed’s business is growing quickly. Therefore, the CEO, Paul Riverbed, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below. 1. The first truck’s list price is $21,420. Riverbed exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $13,260. Riverbed normally sells the equipment for $20,145. Riverbed uses a perpetual inventory system. 2. The second truck has a list price of $22,440. Riverbed makes a down payment of $5,100 cash on this truck and signs a zero-interest-bearing note with a face amount of $17,340. Payment of the note is due September 20, 2018. Riverbed would normally have to pay interest at a rate of 8% for such a borrowing. 3. The list price of the third truck is $19,584. This truck is acquired in exchange for 1,224 shares of common stock in Riverbed Corporation. The stock has a par value per share of $12 and a market price of $14 per share.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Riverbed Corporation builds in-home theater systems. Riverbed’s business is growing quickly. Therefore, the CEO, Paul Riverbed, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below.
| 1. | The first truck’s list price is $21,420. Riverbed exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $13,260. Riverbed normally sells the equipment for $20,145. Riverbed uses a perpetual inventory system. | |
| 2. | The second truck has a list price of $22,440. Riverbed makes a down payment of $5,100 cash on this truck and signs a zero-interest-bearing note with a face amount of $17,340. Payment of the note is due September 20, 2018. Riverbed would normally have to pay interest at a rate of 8% for such a borrowing. | |
| 3. | The list price of the third truck is $19,584. This truck is acquired in exchange for 1,224 shares of common stock in Riverbed Corporation. The stock has a par value per share of $12 and a market price of $14 per share. |
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