Level I

Warranty Liability

A firm sells a remarkable product, which serves many household purposes. The firm is confident
about its product and is so anxious to sell a large number of units that it grants a 3-year warranty.
The warranty agreement specifies that any malfunction or other problem will be fixed at no cost
to the customer, unless the customer has abused the product. Based on experience with other
household products it has sold in the past, 3% of total units sold will require service over the
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Help please: Calculating face value of note payable from its present value

On January 1, 2000, a company purchased a machine that had a list price of $23,500. The
purchase terms agreed upon were: cash down payment $12,000 plus a 15% note payable of
$9,132 (its present value). The note is payable in three equal annual instalments (interest plus
principal) on each December 31. Round to the nearest dollar.
 
Required:
(a)Give the entry to record the acquisition of the machine.
(b)Give the adjusting entry required on September 30, 20x2, for interest assuming this is the end
of the accounting period.
 
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How i got above 70% in all sections of CFAL1 exam?

First of all i would like to wish you all thebest  for the upcoming CFAL1 exams.With just 2 months remaining for the CFAL1 exams,i will be sharing with you all strategies that helped me to pass this exam.

1)I completed all the 5 schweser note books approximately 55 days before the december 2013 exam. Continue reading

Portfolio Return / Portfolio Risk

I am quite unsure of the following::

An investor wants to invest in index by borrowing 35% at the Risk Free Rate. Expected Return of the index is 14% & Standard devisation is 18%, the risk free rate is 7%. What is the expected return & Standard deviation of the portolio?

A: Port Return = 11.55%, Port Risk = 11.70%

B: Port Return = 11.55%, Port Risk = 18%

C: Port Return = 16.45%, Port Risk = 24.30%

Could you please break down simplistically how to calcualte this.

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