Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
15th Edition
ISBN: 9780133781106
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
Question
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Chapter 5, Problem 5.29E

1.

To determine

To calculate: The profitability of the three customers L, W and C

Given information:

The average premium account balance for 2014 of customer L is $1,200.

The average premium account balance for 2014 of customer W is $700.

The average premium account balance for 2014 of customer C is $24,900.

2.

To determine

To define: The reason of worry about the profitability of individual customers if the Premium Account offering is profitable as a whole.

3.

To determine

To define: The changes recommended to USB premium account.

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Blockbuster Co is building a new state of the art Cineplex at a cost of $3,500,000. They received a capital investment of $1,500,000. The remainder of funds will have to be borrowed so they decided to issue bonds. They have issued 10.5%, 5-year bonds. These bonds were issued on January 1st, 2020, and pay semi-annual interest on July 1st and January 1st. The bonds yield 10%. The year-end is December 31st. Requirements: (Show all workings) Calculate the proceeds from the sale of the bond. Clearly, show the amount of the premium or discount and state two reasons, which support the premium or discount calculated. Compute the Present Value of Interest Payments show all steps using the formula.
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