Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

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Answer 1

Question

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

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Acorn Construction (calendar-year-end C corporation) has had rapid expansion during the last half of the current year due to the housing market's recovery. The company has record income and would like to maximize its cost recovery deduction for the current year. (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Note: Round your answer to the nearest whole dollar amount. Acorn provided you with the following information: Asset Placed in Service Basis New equipment and tools August 20 $ 3,800,000 Used light-duty trucks October 17 2,000,000 Used machinery November 6 1,525,000 Total $ 7,325,000 The used assets had been contributed to the business by its owner in a tax-deferred transaction two years ago. a. What is Acorn's maximum cost recovery deduction in the current year?

Answer 2

Question

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

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Answer 3

Question

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

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Answer 4

Question

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

Expert Solution & Answer

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Answer 5

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

Answer 6

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

Answer 7

Chapter 9, Problem 10ATC

a.

To determine

Show the effects of issuing the two notes on the financial statements using separate horizontal financial statement models in a spreadsheet. Record the transaction amounts under the appropriate categories and indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) in the cash flow statement column.

Answer 8

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

Answer 9

b.

To determine

Compute the total amount of interest to be paid on each note using spreadsheet.

Answer 10

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

Answer 11

c.

To determine

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

Answer 12

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

Answer 13

d.

To determine

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 9 - Prob. 1Q Ch. 9 - Prob. 2Q Ch. 9 - Prob. 3Q Ch. 9 - Prob. 4Q Ch. 9 - Prob. 5Q Ch. 9 - Prob. 6Q Ch. 9 - Prob. 7Q Ch. 9 - Prob. 8Q Ch. 9 - Prob. 9Q Ch. 9 - Prob. 10Q

Compute the total amount of interest to be paid on each note using spreadsheet.

Compute the amount of cash that was received from each note when it was issued using spreadsheet.

Identify the note that carries the higher effective interest rate using spreadsheet and justify with appropriate computations.

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Chapter 9 Solutions