On December 30, 2007, Cey, Inc On Cey's December 31, 2007 Balance Sheet, the Net Note

question 41

Multiple Choice

On December 30, 2007, Cey, Inc.purchased a machine from Frank Corp.in exchange for a noninterest-bearing note requiring eight payments of $50,000.The first payment was made on December 30, 2007, and the others are due annually on December 30.At date of issuance, the prevailing rate of interest for this type of note was 11%.Present value factors are as follows: $\begin{array}{lll}& \text { Present Value of Ordinary }& \text {Present Value of }\\ \text {Period }& \text { Annuity of 1 at 11 \%}& \text {Annuity Due of 1 at 11 \% }\\7 & 4.712 & 5.231 \\8 & 5.146 & 5.712\end{array}$ On Cey's December 31, 2007 balance sheet, the net note payable to Frank is

• A)$235,600.
• B)$257,300.
• C)$261,775.
• D)$285,600.

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Definitions:

Direct Labor Budget

A financial plan that estimates the cost of direct labor needed to meet production needs within a specific timeframe.

Direct Labor-Hour

A measure of the amount of time workers spend directly working on manufacturing a product or providing a service.

Labor Rate

The cost per hour that a company pays for labor, often used in calculating the total labor cost of a project or production.

Selling and Administrative Expense Budget

outlines predicted selling expenses and administrative costs for a future period.