社大会计作业题目更新
ACCOUNT FOR ACCOUNTS PAYABLE AND ANALYZE ACCOUNTS PAYABLE TURNOVER
Amounts owed for products or services purchased on account are accounts payable.
Amazon.com, Inc.’s Accounts Payable at December 31, 2016 was $25,309 million (line 12 on page 437). For example, the company purchases all its inventory as well as pays most of its operating expenses through accounts payable.
We have seen many accounts payable examples in preceding chapters.
Accounts Payable Turnover. An important measure of liquidity for a retail business is a ratio called accounts payable turnover, which measures the number of times a year the company is able to pay its accounts payable.
The ratio is computed as follows:
Accounts payable turnover (T/O) = Purchases from suppliers (assumed all on credit) / Average accounts payable
Turnover expressed in days = 365 / T/O (computed above）
Amounts owed for products or services purchased on account are accounts payable.
Amazon.com, Inc.’s Accounts Payable at December 31, 2016 was $25,309 million (line 12 on page 437). For example, the company purchases all its inventory as well as pays most of its operating expenses through accounts payable.
We have seen many accounts payable examples in preceding chapters.
Accounts Payable Turnover. An important measure of liquidity for a retail business is a ratio called accounts payable turnover, which measures the number of times a year the company is able to pay its accounts payable.
The ratio is computed as follows:
Accounts payable turnover (T/O) = Purchases from suppliers (assumed all on credit) / Average accounts payable
Turnover expressed in days = 365 / T/O (computed above）
Large companies cannot borrow billions from a single lender. So how do corporations borrow huge amounts? They issue (sell) bonds to the public to obtain the funds. Bonds payable are groups of debt securities issued to multiple lenders, called bondholders. The certificate states the principal, which is the amount the company has borrowed. The company must then pay each bondholder the principal amount at a specific future date, called the maturity date, plus interest. Interest is the fee paid by a borrower for the use of someone else's money. The bond certificate states the interest rate that the issuer will pay the holder and the dates that the interest payments are due (generally twice a year).
A bond can be issued (sold) at a price that is equal to the par value of the bond, below the par value of the bond, or above the par value of the bond. Whether a bond sells at par, below par, or above par depends on the relationship between the stated interest rate on the bond and the current market rate of interest at the time the bond is sold. Bonds sold at a price equal to par value are said to be sold at par. Bonds sold at a price below par are said to be sold at a discount; and, bonds sold at a price above par are said to be sold at a premium.
A bond can be issued (sold) at a price that is equal to the par value of the bond, below the par value of the bond, or above the par value of the bond. Whether a bond sells at par, below par, or above par depends on the relationship between the stated interest rate on the bond and the current market rate of interest at the time the bond is sold. Bonds sold at a price equal to par value are said to be sold at par. Bonds sold at a price below par are said to be sold at a discount; and, bonds sold at a price above par are said to be sold at a premium.
The present value of a bondlong dashits market pricelong dashis the present value of the future principal amount at maturity plus the present value of the future stated interest payments. The principal is a single amount to be received by the investor and paid by the debtor at maturity. The interest is an annuity because it occurs periodically. Let's begin by computing the amount of interest the investor will receive semiannually. Since the bonds pay interest twice per year, these bonds pay 2.5% semiannually.
Face value
x
Semiannual interest rate (stated)
=
Interest payment
$530,000
x
2.5%
=
$13,250
At issuance, the market interest rate is 9% annually, but it is computed at 4.5% semiannually (again, because the bonds pay interest twice a year). Therefore, the effective (market) interest rate for each of the 20 periods (10 years x 2) is 4.5%.
Now, open an Excel Superscript ® spreadsheet to a blank cell. Click the insert function button (f Subscript x). Then select the "Financial" category from the drop down box. Scroll down the function list and select "PV". Double-click PV. In the box that appears, enter the interest rate as a decimal (Rate = 0.045), the number of periods (Nper = 20), the semiannual interest payment as a negative number (Pmt = -13250), and the future (face) value of the bonds as a negative number (-530000). The present value of the annuity will appear at the bottom of the box after the "=" sign as shown below.
negative 13250
392115.87361
$ 392 comma 115.87
negative 530000
Face value
x
Semiannual interest rate (stated)
=
Interest payment
$530,000
x
2.5%
=
$13,250
At issuance, the market interest rate is 9% annually, but it is computed at 4.5% semiannually (again, because the bonds pay interest twice a year). Therefore, the effective (market) interest rate for each of the 20 periods (10 years x 2) is 4.5%.
Now, open an Excel Superscript ® spreadsheet to a blank cell. Click the insert function button (f Subscript x). Then select the "Financial" category from the drop down box. Scroll down the function list and select "PV". Double-click PV. In the box that appears, enter the interest rate as a decimal (Rate = 0.045), the number of periods (Nper = 20), the semiannual interest payment as a negative number (Pmt = -13250), and the future (face) value of the bonds as a negative number (-530000). The present value of the annuity will appear at the bottom of the box after the "=" sign as shown below.
negative 13250
392115.87361
$ 392 comma 115.87
negative 530000
2. Prepare an effective-interest amortization table for the bond through the first three interest payments. Round amounts to the nearest dollar.
The effective-interest amortization method keeps each interest expense amount at the same percentage of the bonds' carrying value or book value for every interest payment over the bonds' life. GAAP specifies that the effective-interest method should be used, because it does a better job of matching. The amortization of the discount each period is the difference between the interest expense and the interest payment.
The effective-interest amortization method keeps each interest expense amount at the same percentage of the bonds' carrying value or book value for every interest payment over the bonds' life. GAAP specifies that the effective-interest method should be used, because it does a better job of matching. The amortization of the discount each period is the difference between the interest expense and the interest payment.