Develop a response in either Word or Excel and follow the instructions outlined in the Assignments Menu for submission.
Answer each of the following unrelated questions:
(a) On January 1, 2007, Sandstone Corporation sold a building that cost $250,000
and had accumulated depreciation of $100,000 on the date of sale.
non-interest-bearing note due on January 1, 2013 was received as consideration.
The prevailing rate of interest for a note of this type on January 1, 2007 was
At what amount should the gain from the sale of the building be reported?
(b) On January 1, 2001, Sandstone Corporation purchased $200,000 face value,
9%, 10-year bonds of Walters Inc.
The bonds mature on January 1, 2011, and
pay interest annually beginning January 1, 2002.
The market rate of interest is
How much did Sandstone pay for the bonds?
(c) Sandstone Corporation brought a new machine and agreed to pay for it in equal
annual installments of $4,000 at the end of each of the next 10 years.
11% market rate of interest applies to this contract, how much was recorded as
the cost of the machine?
(d) Sandstone Corporation purchased a special tractor on December 31, 2013.
purchase agreement stipulated that Sandstone should pay $20,000 at the time of
purchase and $5,000 at the end of each of the next 8 years.
The tractor should
be recorded on December 31, 2013, at what amount, assuming the market rate
of interest was 11%?
(e) Sandstone Corporation wants to withdraw $100,000 from an investment fund at
the end of each year for 9 years.
What should be the required initial investment
at the beginning of the first year if the fund earns 11%?
11% Interest Table Factors
Present Value of
Present Value of an
Ordinary Annuity of $1