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    1. The document shows the present value and interest calculations for an investment purchased on 1/31/20X1 for $4,353,611. It provides the carrying amount, interest received, and interest income for years 20X1 through 20X2. In 20X2, the investment was sold for $4,700,000, realizing a gain of $175,092. 2. It also shows the calculation of net income for three different investments. The first investment generated $110,000 in net income in 20X1 through interest and unrealized gains, less transaction costs. The second investment had a carrying amount of $1,070,000 on 12/31/20X1 and $

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    1. The document shows the present value and interest calculations for an investment purchased on 1/31/20X1 for $4,353,611. It provides the carrying amount, interest received, and interest income for years 20X1 through 20X2. In 20X2, the investment was sold for $4,700,000, realizing a gain of $175,092. 2. It also shows the calculation of net income for three different investments. The first investment generated $110,000 in net income in 20X1 through interest and unrealized gains, less transaction costs. The second investment had a carrying amount of $1,070,000 on 12/31/20X1 and $

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    10 views2 pages

    ACCT104 Quizzes Solutions

    Uploaded by

    Away To Ponder
    1. The document shows the present value and interest calculations for an investment purchased on 1/31/20X1 for $4,353,611. It provides the carrying amount, interest received, and interest income for years 20X1 through 20X2. In 20X2, the investment was sold for $4,700,000, realizing a gain of $175,092. 2. It also shows the calculation of net income for three different investments. The first investment generated $110,000 in net income in 20X1 through interest and unrealized gains, less transaction costs. The second investment had a carrying amount of $1,070,000 on 12/31/20X1 and $

    Copyright:

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    of 2

    1 PV - P (5,000,000 x PV1@5.

    5%,n=12) 2,629,908
    PV - I (200,000 x PVOA@5.5%,n=12) 1,723,704
    Market Price, 1/31/20X1 4,353,611
    *2-7
    Date Int. Rcvd Int Inc. DA CA

    1/1/20X1 4,353,611
    6/30/20X1 200,000 239,449 39,449 4,393,060
    12/31/20X1 200,000 241,618 41,618 4,434,678
    6/30/20X2 200,000 243,907 43,907 4,478,585
    12/31/20X2 200,000 246,322 46,322 4,524,908

    2 481,067
    3 81,067
    4 4,434,678
    5 490,229
    6 90,229
    7 4,524,908
    8 Selling Price 4,700,000
    CA of the investment sold 4,524,908
    Gain on sale 175,092
    1 Interest Income (1,000,000 x 10%) 100,000
    Transaction costs (10,000)
    Unrealized Gain (1,000,000 x 2%) 20,000
    Net income 110,000

    2 Carrying amount, 12/31/20X1 1,070,000

    3 Interest income 100,000


    Unrealized loss (30,000)
    Net income 70,000

    4 Carrying amount, 12/31/20X2 1,040,000

    5 Interest income 100,000


    Unrealized loss (30,000)
    Net income 70,000

    6 Carrying amount, 12/31/20X3 1,010,000

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