8th Edition

ISBN: 9781305961883

Author: Carl Warren

Publisher: Cengage Learning

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Chapter 14, Problem 14.2E

Divisional income statements
The following data were summarized from the accounting records for Vintage Construction Company for the year ended October 31, 20Y3.

Chapter 14, Problem 14.2E, Divisional income statements The following data were summarized from the accounting records for
Prepare divisional income statements for Vintage Construction Company.

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Chapter 14, Problem 14.1E

Chapter 14, Problem 14.3E

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Suppose you take out a five-year car loan for $14000, paying an annual interest rate of 4%. You make monthly payments of $258 for this loan. Complete the table below as you pay off the loan. Months Amount still owed 4% Interest on amount still owed (Remember to divide by 12 for monthly interest) Amount of monthly payment that goes toward paying off the loan (after paying interest) 0 14000 1 2 3 + LO 5 6 7 8 9 10 10 11 12 What is the total amount paid in interest over this first year of the loan?

Suppose you take out a five-year car loan for $12000, paying an annual interest rate of 3%. You make monthly payments of $216 for this loan. mocars Getting started (month 0): Here is how the process works. When you buy the car, right at month 0, you owe the full $12000. Applying the 3% interest to this (3% is "3 per $100" or "0.03 per $1"), you would owe 0.03*$12000 = $360 for the year. Since this is a monthly loan, we divide this by 12 to find the interest payment of $30 for the month. You pay $216 for the month, so $30 of your payment goes toward interest (and is never seen again...), and (216-30) = $186 pays down your loan. (Month 1): You just paid down $186 off your loan, so you now owe $11814 for the car. Using a similar process, you would owe 0.03* $11814 = $354.42 for the year, so (dividing by 12), you owe $29.54 in interest for the month. This means that of your $216 monthly payment, $29.54 goes toward interest and $186.46 pays down your loan. The values from above are included…

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Chapter 14 Solutions

Survey of Accounting (Accounting I)

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Divisional income statements The following data were summarized from the accounting records for Vintage Construction Company for the year ended October 31, 20Y3. Prepare divisional income statements for Vintage Construction Company.

Solution Summary: The author explains that the Divisional Income Statement shows the Profit or Losses which the operating division generate during the accounting year after deducting cost of goods sold and operating expenses from the net revenue.

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Chapter 14 Solutions