7 Homework Liabilities

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Feb 20, 2024

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7: Homework - Liabilities Abardeen Corporation borrowed $61,000 from the bank on October 1, Year 1. The note had an 6 percent annual rate of interest and matured on March 31, Year 2. Interest and principal were paid in cash on the maturity date. Required a. What amount of cash did Abardeen pay for interest in Year 17 b. What amount of interest expense was recognized on the Year 1income statement? (Do not round intermediate calculations. Round your answer to the nearest do! llar amount.) c. What amount of total liabilities was reported on the December 31, Year 1, balance sheet? (Do not round intermediate calculations. Round your answer to the nea rest dollar amount.) d. What total amount of cash was paid to the bank on March 31, Year 2, for principal and interest? e. What amount of interest expense was reported on the Year 2 income statement? (Do not round intermediate calculations. Round your answer to the nearest do! llar amount.) & Answer is complete and correct. Amount of cash paid Q@ Interest expense 9158 Total liabilities 61915@ Amount of cash paid 62,830 @ olalo oo h N || h | " Interest expense 915@ To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Deloch purchased the stereo systems for $161,000 and sold them for $302,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to 6 percent of sales. During the year, she paid $1,910 cash to replace a defective tuner. Required a-1. Prepare an income statement for Deloch’s first year of operation. a-2. Prepare a statement of cash flows for Deloch’s first year of operation. Complete this question by Required Al Required A2 €) Answer is complete but not entirely correct. entering your answers in the tabs below. Prepare an income statement for Deloch’s first year of operation. DELOCH STEREOS Income Statement Sales revenue $ 302,000 @ Cost of goods sold (161,000) &@ Gross margin Warranty expense (18.120) @ Net income (] o Q| 141,000 @ @ $ 122,880 Required A2 >

To support herself while attending school, Daun Deloch sold stereo systems to other students. During the first year of operations, Deloch purchased the stereo systems for $161,000 and sold them for $302,000 cash. She provided her customers with a one-year warranty against defects in parts and labor. Based on industry standards, she estimated that warranty claims would amount to & percent of sales. During the year, she paid $1.910 cash to replace a defective tuner Required 1. Prepare an income statement for Deloch’s first year of operation. 2. Prepare a statement of cash flows for Deloch’s first year of operation. © Answer is complete and correct. [ this. by ng your in the tabs below. | Required A1 | Required A2 ‘ Prepare a statement of cash flows for Deloch’s first year of operation. (Cash outflows should be indicated with a minus sign.) DELOCH STEREOS N of Cash Flows. (Cash flows from operating actvies [ infiow from customers O 5302000 Outflow to purchase inventory @ (161,000 @ Outflow for warranty expense O 19100 Net cash flow from operating actvties s 139,000 Cash flows from investing activities 9 Cash flows from financing activities (1] Net change n cash 139,090 Plus: Beginning cash balance [] s 9 Ending cash balance 5139000 Colson Company has a line of credit with Federal Bank. Colson can borrow up to $421500 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal 1o 3.00 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Colson pays 6.75 percent (375 percent = 3.00 percent) annual interest on $82,200 for the month of January. Amount Borrowed Prine Rate for Honth or (Repaid) the Montn January s 82,200 3.75% February 116,800 2.75 Harch (22,800) 3.25 April 25,100 3.75 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson's liabilty at the end of each of the first four months © Answer is complete but not entirely correct. Complete Qquestion by entering your answers in the tabs below. Required & | Required B Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. (Round your answers to the nearest whole dollar.) wonn | s January s 394 Q February 783 Q March 762Q April 9550

Colson Company has a line of credit with Federal Bank. Colson can borrow up to $421,500 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the first four months of the year. Colson agreed to pay interest at an annual rate equal to 3.00 percent above the bank’s prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest 2125 rate is applied to the outstanding monthly balance. For example, Colson pays 6.75 percent (3.75 percent + 3.00 percent) annual interest on $82,200 for the month of January. points Amount Borrowed Prime Rate for Month or (Repaid) the Month January $ 82,200 3.75% February 116,800 2.75 March (24,800) 3.25 April 25,100 3.75 Required a. Compute the amount of interest that Colson will pay on the line of credit for the first four months of the year. b. Compute the amount of Colson'’s liability at the end of each of the first four months. © Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A | Required 8 Compute the amount of Colson’s liability at the end of each of the first four months. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) Balance Month End of Month January s 82200@ February 199,000 @ March 174,200 @ April 199,300 @ < Required A ‘Tne folowing wansactions apply to Ozark Saes for Year 1.Tne business was started when the Company reci 2 Purchased equipment inventory of $175.500 o 3. Sola equipment fo $196,500 cash (notIncuding s merchandisa had a costof $121500. 4. Provided a shmonth warranty on the equipment solc. Based on Indusry @STMates the WalTanty Ciaims would amount 1o 5 percent of sa 5. Pald the sales tax 1o he state agency on $146,500 0f the sales. 6.0n Septamber 1, Year 1, borrowed $20.000 rom the local bank. T note had a 6 percent Itarest rate and matused on March | of common stock. $49.500 fromthe n s 21 Sales tx of 7 perc 7.Paid §5.900 for warranty repars during the year. 8 Paid operating expensas of §52000 for the year. 9. Paid $125.600 of accounts payadle. 10. Recorded accrusd Intereston the note 55ued I ransacion no. 6. Required . Record the given ransactions n a norzontal satements model. b. Prepare the Income statement,balance shet, and statement of cash flows for Yaar | € What s the toal amount of curent abities at December 31, Yaar 12 © Answer is not complete. Complete this question by entering your answers i the tabs below. Racard the given tansactions n a horizontalstatamans madl. (£ activey (08), an investing acvy (1), or Fnancing aciviy (F2), and leve the cel Bark £ thare 5 ne [ Baince Shest income Strmert e Rt = Tamies T Seoa ey = e R R =——— Vot |, mwet | News |, Cowmon || |Aemesa |Revwwe - |Exeme L ey Farabie = Foie |* [Py === [ ] 00 B a . “O[Fh z | mmel- | mmel- B 3 5 n [Tme [ me 3 EET)E ) = e D : 3 - [mmel_[me) : D D el | wme T el el 3 - ) ) « [ ame|> D : 3 5 B[ © T emel B O T 5 ) i mmel B B 3 | ewel [ewe|emon o T mmel e[ B 3 - T ) o B B B 3 B CET) G [ | EX L P - - N A ) R ()

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