&company; hs Net Credit Sales of $700,000 for the yeur and it estimates that ite

Question

&company; hs Net Credit Sales of $700,000 for the yeur and it estimates that itectible count will be 2% ef Net Sales. Allowance fr pub tal Acorn s oredis ICR) belance of $1,000 prior te adjustment, its balnce afier adjustment will be ) 514,0 B $15.00 )$13,000 The Interntteassaoe, 10%, A) $5,000 B) 5500 C 55050 D) $5,500 1-year Note Receivable is 21. The Interest on a S4,00e, 6%, 6nday sete receivable is A) 5240 B) 540 c) $80. D) 5120 The Interest on a 55,000, 6%, 90-day note receivable is A) 300 B) $150 C) 575 D) $225 23. on November 1, Kinder Company received a S6,000, 10%, three-month (3) note receivable. The eash to be received by Kinder Compamy when the note becomes due (or its Maturity Value) is A) $6,000 B) $6,100. C) $6,150 D) $6,500 Page 5

Explanation / Answer

19 Balance after adjustment = 1000+(700000*2%) = 15000 20 Interest = 5000*10% = 500 21 Interest = 4000*6%/360*60=40 22 Interest = 5000*6%/360*90=75 23 Cash to be received = 6000+(6000*10%/12*3)=6150

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