RSM221H1 Lecture 1: RSM 221 Lecture 2 - Practice Questions.pdf
Document Summary
Note: in order to answer this question, make sure to read the additional reading posted on. Blackboard (this topic is not covered in the textbook). On january 1, 2010, rosen entered into an instalment sale contract with diehl company for a four year period expiring january 1, 2014. Equal annual payments under the instalment sale are ,190. 40 and are due on january 1. The first payment was made on january 1, 2010. The cash selling price of the equipment, i. e. , the amount that would be realized on an outright sale, is ,000. The cost of sales relating to the equipment is ,000. The finance charges relating to the instalment period are ,952. 07 based on a stated interest rate of 8% which is appropriate. Circumstances are such that the collection of the instalment sale is reasonably assured and measurement uncertainties do not exist. Assume that the income tax rate is 30 %.
