Foodmark,Inc.,is a large food-marketing company.Footnote information from the company's 2014 annual report appears below.Independent retailers use funds loaned by Foodmark to finance the acquisition of property used in retail food operations.Foodmark records these loans in its long-term notes receivable account.The net balance of the long-term notes receivable account at the end of 2014 is (in thousands of dollars)$36,731.The following information is available from the company's footnotes:
The life of the notes range from 1 to 10 years,with the average being 6 years,and may be non-interest bearing or bear interest at rates ranging primarily from 5 to 12 percent.
Assume the following for purposes of this case:
a.The notes receivable account is comprised of one 8-year, 10 percent note with seven years remaining in its term at the end of 2014.
b.Foodmark financed 100 percent of the asset acquisitions for the retailer.
c.Annual payments on the note are received at the end of each year, include principal and interest, and are a constant amount each year.Required:Determine the market value of the assets financed by Foodmark at the date of acquisition by the retailer (debtor).

Question

Quizplus · Accepted Answer

The Answer of Foodmark,Inc.,is a large food-marketing company.Footnote information from the company's 2014 annual report appears below.Independent retailers use funds loaned by Foodmark to finance the acquisition of property used in retail food operations.Foodmark records these loans in its long-term notes receivable account.The net balance of the long-term notes receivable account at the end of 2014 is (in thousands of dollars)$36,731.The following information is available from the company's footnotes:
The life of the notes range from 1 to 10 years,with the average being 6 years,and may be non-interest bearing or bear interest at rates ranging primarily from 5 to 12 percent.
Assume the following for purposes of this case:
a.The notes receivable account is comprised of one 8-year, 10 percent note with seven years remaining in its term at the end of 2014.
b.Foodmark financed 100 percent of the asset acquisitions for the retailer.
c.Annual payments on the note are received at the end of each year, include principal and interest, and are a constant amount each year.Required:Determine the market value of the assets financed by Foodmark at the date of acquisition by the retailer (debtor).