Question

Sheffield Corp. uses the composite method and its composite rate is 7.5% per year, what entry should it make when plant assets that originally cost $134000?

Answer 1

$ 142 375

Step-by-step explanation:

Thinking process:

Let the composite rate be given by the formula:

`A = P (1+(r)/(n))^(nt)`

where

A = amount after interest

`(r)/(n)` = interest rate

t = time

n = number of times (per year)

Therefore, this gives:

`A =134 000 (1+(0.75)/(12))^(1)\\ = $ 142 375`