Intermediate Accounting

30.(1.5 points) On 12-31-15 Acme entered into an agreement that required Acme to pay someone \$250,000 on 12-31-28. Assume the appropriate market rate of interest for Acme was 15%.

As of 12-31-15, what was the present value of Acme’s obligation?

As of 12-31-21, what was the present value of Acme’s obligation?

As of 12-31-24, what was the present value of Acme’s obligation?

31.(1 point) On 12-31-13 Austin entered into an agreement that required Austin to pay a supplier \$600 every year on 12-31 until 2021. The agreement required Austin to make the first annual payment on 12-31-14. Assume the market rate of interest for Austin is 8%. As of 12-31-13 what was the present value of Austin’s obligation?

32.(2.5 points) On 12-31-14 J entered into an agreement allowing J to collect the following:

Starting 12-31-14, \$2,500 every 12-31 until 2022.

On 12-31-23, a one-time collection of \$7,000.

Nothing in 2024 or 2022.

Starting 12-31-25, \$1,000 every 12-31 until 12-31-40.

How much total cash will J eventually collect?

Assume a market interest rate of 2%. As of 12-31-14, what was the present value of J’s receivable?

33.(3 points) On 12-31-16 O entered into an agreement that allowed O to collect the following:

Starting 12-31-19, \$5,000 every 12-31 until 2026

Nothing in 2027

Starting 12-31-28, \$1,000 every 12-31 until 12-31-81

Assume a market interest rate of 6.5%. As of 12-31-16, what was the present value of O’s receivable?

34.(2 points) On 12-31-13 O accepted a 3%, 6-year, \$500,000 note in exchange for services O rendered to P. O will collect the note principle in full upon maturity and O will collect interest every December 31 starting December 31, 2014. The market rate of interest at the time services were rendered was 2%. What was the present value of O’s receivable as of 12-31-13?

35.(2 points) On 12-31-16 Ashley entered into an agreement that required Ashley to pay a supplier \$80 every quarter (every 3 months) starting 03-31-17. Ashley’s last quarterly payment will be 12-31-22. Assume the market rate of interest for Ashley is 8%. As of 12-31-16 what was the present value of Austin’s obligation?