Chapter 4

1 Invoice Price 240,000.00

Discount 9,600.00
230,400.00

2 100,000 x 90% x 97% 87,300.00

3 Sales Price 250,000.00

Freight 20,000.00
270,000.00

4 100,000 x 50% x 2%

5 Beginning 10,800.00
Expense for the year 13,500.00
Write off - 18,000.00
6,300.00

6 1,000,000 x 3% 30,000.00

7 Age Amount % Allowance

0-60 120,000.00 1% 1200
61-120 90,000.00 2% 1800
Over 120 100,000.00 6% 6000
9000

8 Beg 150,000.00
Credit sales 600,000.00
Collections - 410,000.00
Write off - 9,000.00
AR Balance 331,000.00

Beg 12,000.00
Expense 15,000.00
Recovery 2,000.00
Write off - 9,000.00
Allowance 20,000.00

9 Beg 80,000.00
Credit sales 150,000.00
Collections - 120,000.00
Write off - 10,000.00
AR Balance 100,000.00
Chapter 5

1 Interest Income (1.2M x 10%) 120,000.00

Interest Income (1.2M + 120k) x 10% 132,000.00
252,000.00

2 (150,000 - 50,000) x 8% 8,000.00

3 (400,000 x 1.10^-3) x 10% 30,053.00

4 Carrying Amount 480,000.00

PV (600,000 x 1.10^-3) 450,789.00
Loss 29,211.00

5 PV of Installments (2M x 1.12^-4) 6,074,699.00 Date Collections Interest Income Amortization PV

Year 1 6,074,699.00
Year 1 2,000,000.00 728,963.88 1,271,036.12 4,803,662.88
Year 2 2,000,000.00 576,439.55 1,423,560.45 3,380,102.43
Year 3 2,000,000.00 405,612.29 1,594,387.71 1,785,714.72
Year 4 2,000,000.00 214,285.77 1,785,714.23 0.48

6 Date Collections Interest Income Amortization PV

Year 1 720,955.00
Year 1 200,000.00 86,514.60 113,485.40 607,469.60
Year 2 200,000.00 72,896.35 127,103.65 480,365.95
Year 3 200,000.00 57,643.91 142,356.09 338,009.87
Year 4 200,000.00 40,561.18 159,438.82 178,571.05
Year 5 200,000.00 21,428.53 178,571.47 - 0.42

7 Unpaid Balance 400,000.00 Date Collections Interest Income Amortization PV

Carrying amount (year 3) 338,009.87 Year 1
Unamortized discount 61,990.13 Year 1 200,000.00 86,514.60 607,469.60
Year 2 200,000.00 72,896.35 127,103.65 480,365.95
Year 3 200,000.00 57,643.91 142,356.09 338,009.87
Year 4 200,000.00
Year 5 200,000.00

8 Carrying amount (beg of Year 2) 480,366.40 Date Collections Interest Income Amortization PV
Monthly payment 200,000.00 Year 1 807,470.00
680,366.40 Year 1 200,000.00 - 200,000.00 607,470.00
Year 2 200,000.00 72,896.40 127,103.60 480,366.40
Year 3 200,000.00 57,643.97 142,356.03 338,010.37
Year 4 200,000.00 40,561.24 159,438.76 178,571.61
Year 5 200,000.00 21,428.59 178,571.41 0.21

9 Date Collections Interest Income Amortization PV

Year 1 1,776,492.00
Year 1 - 1 350,000.00 88,824.60 261,175.40 1,515,316.60
Year 1 - 2 350,000.00 75,765.83 274,234.17 1,241,082.43
Year 2 - 1 350,000.00 62,054.12 287,945.88 953,136.55
Year 2 - 2 350,000.00 47,656.83 302,343.17 650,793.38
Year 3 - 1 350,000.00 32,539.67 317,460.33 333,333.05
Year 3 - 2 350,000.00 16,666.65 333,333.35 - 0.30

10 Collections PVF Date Collections Interest Income Amortization PV

400,000.00 0.909090909 363,636.36 Year 1 761,833.21
300,000.00 0.826446281 247,933.88 Year 1 400,000.00 76,183.32 323,816.68 438,016.53
200,000.00 0.751314801 150,262.96 Year 2 300,000.00 43,801.65 256,198.35 181,818.18
761,833.21 Year 3 200,000.00 18,181.82 181,818.18 -