Accounting

Giovinazzo Construction Company plans to buy a new dump truck that has a sticker price of $68,800. The dealer has offered to finance the truck on an installment note at 5 percent interest for 48 months.

Required:

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A. What cost will be assigned to the truck and the note?

B. What is the monthly payment?

C. If Giovinazzo buys the truck on October 31, 2011, what is the interest expense shown on the budgeted income statement for calendar year 2011?

D. If Giovinazzo buys the truck on October 31, 2011, what is the carrying value of the note shown on the budgeted balance sheet for 2011?

Barden Company needs to borrow $400,000. It agrees to make monthly payments of principal and interest over the next 12 years. The bank agrees to loan Barden the money at 6 percent interest.

Required:

A. How much money will Barden receive from this loan?

B. How much is the monthly payment?

C. What amounts would be shown on the budgeted income statement for the first two months?

D. What amounts would be shown on the budgeted statement of cash flows for the first two months and how would it be classified?

E. What amounts would be shown on the budgeted balance sheet for the first two months?

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