Calculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. Previous Balance Annual Percentage Rate (APR) Monthly Periodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and Credits New Balance (in $) $1,026.61 1.75% $322.20 $300.00 Step 1 In the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated. Previous Balance Annual Percentage Rate (APR) Monthly Periodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and Credits New Balance (in $) $1,026.61 1.75% $322.20 $300.00 Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula. monthly periodic rate = APR 12 By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR. APR = monthly periodic rate ✕ 12 The monthly periodic rate is given to be 1.75%. Find the APR. APR = 12 ✕ monthly periodic rate = 12 ✕ 1.75 1.75 % = 21 21 % Step 2 The APR was found to be 21% based on the periodic rate of 1.75%. This gives the following table. Previous Balance Annual Percentage Rate (APR) Monthly Periodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and Credits New Balance (in $) $1,026.61 21% 1.75% $322.20 $300.00 The finance charge is the dollar amount paid for the credit and is also known as the interest. This can be found by multiplying the previous balance by the monthly periodic rate expressed as a decimal. The previous balance is given to be $1,026.61. As a decimal, the monthly periodic rate is 1.75% = . Use these values to find the finance charge, rounding the result to the nearest cent. finance charge = previous month's balance ✕ monthly periodic rate = 1,026.61 ✕ = $
Calculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. Previous Balance Annual Percentage Rate (APR) Monthly Periodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and Credits New Balance (in $) $1,026.61 1.75% $322.20 $300.00 Step 1 In the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated. Previous Balance Annual Percentage Rate (APR) Monthly Periodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and Credits New Balance (in $) $1,026.61 1.75% $322.20 $300.00 Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula. monthly periodic rate = APR 12 By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR. APR = monthly periodic rate ✕ 12 The monthly periodic rate is given to be 1.75%. Find the APR. APR = 12 ✕ monthly periodic rate = 12 ✕ 1.75 1.75 % = 21 21 % Step 2 The APR was found to be 21% based on the periodic rate of 1.75%. This gives the following table. Previous Balance Annual Percentage Rate (APR) Monthly Periodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and Credits New Balance (in $) $1,026.61 21% 1.75% $322.20 $300.00 The finance charge is the dollar amount paid for the credit and is also known as the interest. This can be found by multiplying the previous balance by the monthly periodic rate expressed as a decimal. The previous balance is given to be $1,026.61. As a decimal, the monthly periodic rate is 1.75% = . Use these values to find the finance charge, rounding the result to the nearest cent. finance charge = previous month's balance ✕ monthly periodic rate = 1,026.61 ✕ = $
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 9E
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Calculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance.
| Previous Balance |
Annual Percentage Rate (APR) |
Monthly Periodic Rate (as a %) |
Finance Charge (in $) |
Purchases and Cash Advances |
Payments and Credits |
New Balance (in $) |
|---|---|---|---|---|---|---|
| $1,026.61 | 1.75% | $322.20 | $300.00 |
Step 1
In the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated.
| Previous Balance |
Annual Percentage Rate (APR) |
Monthly Periodic Rate (as a %) |
Finance Charge (in $) |
Purchases and Cash Advances |
Payments and Credits |
New Balance (in $) |
|---|---|---|---|---|---|---|
| $1,026.61 | 1.75% | $322.20 | $300.00 |
Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula.
monthly periodic rate =
| APR |
| 12 |
By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR.
APR = monthly periodic rate ✕ 12
The monthly periodic rate is given to be 1.75%. Find the APR.
| APR | = | 12 ✕ monthly periodic rate |
| = | 12 ✕ 1.75
1.75 % |
|
| = | 21
21 % |
Step 2
The APR was found to be 21% based on the periodic rate of 1.75%. This gives the following table.
| Previous Balance |
Annual Percentage Rate (APR) |
Monthly Periodic Rate (as a %) |
Finance Charge (in $) |
Purchases and Cash Advances |
Payments and Credits |
New Balance (in $) |
|---|---|---|---|---|---|---|
| $1,026.61 | 21% | 1.75% | $322.20 | $300.00 |
The finance charge is the dollar amount paid for the credit and is also known as the interest. This can be found by multiplying the previous balance by the monthly periodic rate expressed as a decimal.
The previous balance is given to be $1,026.61. As a decimal, the monthly periodic rate is
1.75% = .
Use these values to find the finance charge, rounding the result to the nearest cent.| finance charge | = | previous month's balance ✕ monthly periodic rate |
| = | 1,026.61 ✕ | |
| = | $ |
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9781337912020
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