Question

ACCT 2301 1. Your goal is to be able to withdraw $10,000 for each of the next nine years beginning one year from today and also to withdraw $50,000 ten years from today. The return on the investment is expected to be 696. What's the amount that needs to be invested today? (2 points) 2. Vigeland Company completed the following transactions during Year 1. Vigeland's fiscal year ends on December 31. Apr. 1 Borrowed $700,000 from Summit Bank for general use; signed a 10- month. 6% annual interest-bearing note for the money. June 14 Received a $15,000 customer deposit for services to be performed in the future. July 15 Performed $3,750 of the services paid for on June 14. Required: Prepare all journal entries for each transaction and adjusting entries required on December 31. (8 points) Page 1 of 1

Answer 1

1	Invested to be today	95,937
	Rate of Return	6%
	Till 9 years	10,000 each year
	10th Year	50,000
	Year	Present Value Factor @ 6%	Amount Required at the end of year	Present Value
	1	0.943	10,000	9,433.96
	2	0.890	10,000	8,899.96
	3	0.840	10,000	8,396.19
	4	0.792	10,000	7,920.94
	5	0.747	10,000	7,472.58
	6	0.705	10,000	7,049.61
	7	0.665	10,000	6,650.57
	8	0.627	10,000	6,274.12
	9	0.592	10,000	5,918.98
	10	0.558	50,000	27,919.74
		Total		95,936.66
2	Date	Particulars	Debit	Credit
	Apr 01	Bank A/c	7,00,000
		To Summit Bank A/c		7,00,000
		(Being Loan taken from Summit Bank against security of 10 Months,6% annual interest bearing note)
	June 14	Bank A/c	15,000
		Advance from Customer A/c		15,000
		(Being advance received from customer for services to be performed in future)
	July 15	Advance from Customer A/c	3,750
		To Sales A/c		3,750
		(Being Services perfomed for $ 3,750 against advance of $ 15,000)