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Tina-50969 - 04/20/2020, 12:37 pm

Please help, how did you get the $69,000 unearned interest?

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Monica-35689 - 05/3/2020, 8:24 am

I believe the question is not wanting the unearned interest. The unearned interest is accumulated over the five years. It is wanting the income or profit made each year.

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user-21492 - 05/18/2020, 2:49 pm

The figures can be broken down by
$500k (total contract amount $100k x 5yrs)
$431k (total Sale amount of $100k x 4.31)
$69k (from unearned interest $500k-$431k)
$331k (AR amount $431k - $100k already paid)
$51k profit ($431k-$380k)
20x0 $100k revenue
20x1 $127k revenue (27k int = 331AR x 8%)
20x2 $121k revenue (21k int = 258AR x 8%)
20x3 $114k revenue (14k int = 179AR x 8%)
20x4 $107k revenue (7k int = 93AR x 8%)

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user-21492 - 05/18/2020, 2:50 pm

Monica-35689 & Tina-50969

When do you sit for FAR??