XYZ Bank loaned cash to a customer on August 1, Year 1. The…
XYZ Bank loaned cash to a customer on August 1, Year 1. The note receivable had a principal amount of $55,000, 6% annual interest rate, and a term of six-months. How much interest income would be reported on the Year 1 income statement dated December 31? [Amount1] How much cash interest would be collected in Year 1? [Answer2] How much interest income would be reported on the Year 2 income statement, assuming no other sources provided interest during the year? [Answer3] How much cash interest would be collected in Year 2? [Answer4] Formula(s): Principal x Monthly Interest x Months in Period
Read DetailsAt the end of the day on June 30, Smith Company’s cash accou…
At the end of the day on June 30, Smith Company’s cash account showed a balance of $4,000. Smith’s June 30 bank statement showed a balance of $5,800. You are preparing the bank reconciliation for the month of June. Indicate how each of the following items would be used in determining the adjusted cash balance at June 30: Smith Company properly issued payment in the amount of $450 for utility expense. This was incorrectly entered in the accounting system for $850. The company deposited $725 of cash receipts on the evening of June 30th, which were not reflected on the bank statement. Outstanding checks totaled $2,500 on June 30. The bank statement included a $125 charge for new checks, the price of which was not previously known by Smith Company. One of Smith’s customers issued payment in the amount of $250, which was deposited by Smith Company. The bank statement didn’t show this deposit, and included a note that this check was returned NSF. Once you’ve classified the above, please determine the following: What was the adjusted cash balance as of June 30? Formula(s): Put the bank balance and the increases/decreases to the bank in one column, and the book balance and the increases/decreases to the book in another column; make sure they equal!
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