Answered

At Westonci.ca, we make it easy to get the answers you need from a community of informed and experienced contributors. Ask your questions and receive detailed answers from professionals with extensive experience in various fields. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

On April 19, 2021, Millipede Machinery sold a tractor to Thomas Hartwood, accepting a note promising payment of $120,000 in five years. The applicable effective interest rate is 7%.

Required:
What amount of sales revenue would Millipede recognize on April 19, 2021, for the Hartwood transaction?

Sagot :

Zviko

Answer:

$85,558.34

Explanation:

The Transaction Price will be the Present Value of the amount to be received in 5 years.

We can simply calculate the Present Value (PV) using a financial calculator as follows :

FV= - $120,000

I = 7 %

N = 5

P/YR = 1

PMT = $0

PV = ?

Entering the data as above gives a Present (PV) as $85,558.34

therefore,

Millipede will recognize an  amount of sales revenue of $85,558.34

We appreciate your visit. Our platform is always here to offer accurate and reliable answers. Return anytime. We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.