A	B	C	D	E	F	G	H
1		INSTRUCTIONS: enter your data in the yellow-shaded cells below. Then, click Recalculate at the top of the screen.
2		Seller's name
3		31 December				2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
4		Your company's cash downpayment, if any
5		Your company's annual cash installment
6		Number of annual cash installments				1 2 3 4 5 6 7 8 9 10
7
8
9
10		This is a reverse-engineered text version of the data entered in the yellow-shaded cells above:
11		On December 31, 2016 your company buys a car from Auto Dealer Ltd. in exchange for $5,000 cash and a note (I.O.U.) requiring payment of four equal annual installments of $10,000 beginning December 31, 2017. Based on the duration of this agreement and Auto Dealer Ltd.'s assessment of future interest rates and your company's creditworthiness, Auto Dealer Ltd. requires a 6.00% rate of return on this financing arrangement. Auto Dealer Ltd. can borrow at 4.50% and its gross profit percentage on car sales is 10.00%.
12		Questions:
13
14
15
16
17
18					Debit	Credit
19
20		Note receivable
21			Sales revenue
22
23
24		Cost of goods sold
25			Inventory
26
27
28		Question 2
29		Date	6.00% x book (or, carrying) value of the note receivable.	Cash installment received.	Book (or, carrying) value of the note.
30
31
32
33
34
35
36
37
38
39
40
41		Totals
42
43					Debit	Credit
44		Cash
45			Note receivable
46
47		Note receivable
48			Interest income
49
50					Debit	Credit
51
52
53
54
55
56
57		© Brian Conheady				For educational purposes.
58