A company that borrowed $50,000 on January 1st would only recognize interest expense in January if the interest expense was paid prior to month-end. True False
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- Accounting Gregory Ltd uses the ageing of accounts receivable method for estimating doubtful debts. The balance of the Allowance for Doubtful Debts account on 1 July 2020 had a credit balance of $9,300. The company is registered for goods and services tax (GST). GST rate is 10%. All transactions below relate to Gregory Ltd's uncollectable accounts for the financial year ended 30 June 2021. July 18 Wrote off the $495 account of B. Betty as uncollectable. Oct. 19 Re-established the account of C. Casy and recorded the collection of $2,530 in full payment of his account, which had been written off previously. Jan. 31 Received 20% of the $2,200 balance owed by D. Delois and wrote off the remainder as uncollectable. June 30 The estimate of uncollectable accounts is based on an ageing of accounts receivable and $18,260 of the accounts receivable as at 30 June was estimated to be uncollectable. Gregory Ltd has a receivable balance of $650,000 on the 30 June 2021. All Accounts Receivable…Mar Company provides the following information on December 31, 2020: Income taxes withheld from employees Cash balance at First State Bank Cash overdraft at Harbor Bank Accounts receivable with credit balance Estimated expenses of meeting warranties on merchandise previously sold Estimated damages as a result of unsatisfactory performance on a contract Accounts payable Deferred serial bonds, issued at par and bearing an interest at 12% payable in semi-annual installment of P500,000 due on April 1 and Oct.1, the last bond to be paid on April 1 and Oct. 1, 2026. Interest is also paid semi-annually. Stock dividend payable Compute the total current liabilities as of Dec. 31, 2020. 900,000 2,500,000 1,300,000 750,000 500,000 1,500,000 3,000,000 5,000,000 2,000,000Campbell Inc. accepted a customer's $80,000 zero-interest-bearing six-month note payable in a sales transaction. The product sold normally sells for $74,000. If the sale was made on July 31, how much interest revenue from this transaction would be recorded for the year ending December 31?
- Danali Corporation borrowed $400,000 on October 1. The note carried a 13 percent interest rate with the principal and interest payable on May 1 of next year. Prepare the following journal entries. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheetClean Enterprise Limited 2021 January S'000 5,000 12,000 18,000 5,000 2020 2021 2021 March S'000 10,000 26,000 10,000 7,000 400 1,000 100 December February S'000 6,000 10,000 000.S Cash sales 12,000 30,000 40,000 5,000 500 1,000 Credit sales Credit purchases Salaries 40,000 5,000 300 1,000 Utilities 300 Depreciation Property taxes Insurance 1,000 3,000 Advertising Statutory deductions Other expenses 500 100 300 1,500 1,800 1,500 100 2,100 200 300 100 Additional information: 1. Collection from credit customers are normally 60% in the month of sale, 30% in the month following sale and the balance of 10% in the second month following sale. 2. The credit sale for November 2020 was $14,000,000. 3. Including in the November 2020 credit sales is a credit sale to Hard Luck Limited. The company (Hard Luck Limited) purchased $100,000 goods on November 1, 2020. A notice in the newspaper on November 6, 2020 indicated that a loan creditor of the company had placed the company into receivership. 4.…True or False with explanation The formula for simple interest is: Interest = Principle x Days outstanding x Time Financial liabilities deliver cash. A current liability is one that is due to be settled within 12 months after the reporting period. Interest on a $10,000, 4% note that is outstanding for 3 months would be $100. A warranty obligation is a type of non-financial liability. With the revenue approach to warranties, unearned revenue is used. A company that uses the expense approach to warranties should never make an accrual of estimated warranty work. When a short-term note is repaid, a debit includes Notes Payable. A liability is considered to be an asset.
- Please! help me with this questionOn September 1, Year 1, West Company borrowed $34,000 from Valley Bank. West agreed to pay interest annually at the rate of 9% per year. The note issued by West carried an 18-month term. West Company has a calendar year-end. What is the amount of interest expense that will be reported on West's income statement for Year 1? Multiple Choice O O $-0- $1,020 $306 $765Anne Taylor comapany borrowed cash on august 1 of year 1, by signing a $46,620(face amount), one year note payable, due on july 31 of year 2. the accounting period of Anne yalor ends December 31. Assume an effective interest rate of 11%. How much cash should Anne Taylor Company receive from the note on August 1 of Year 1, assuming the note is a noninterest-bearing note?
- At the start of the current year, a company issued a $1,000,000 note to a bank. The company must pay the bank $200,000 plus interest each January 1 for the next five years starting at the beginning of next year. The company will report the note payable on its current year's balance sheet as O Current liabilities, $500,000; Long-term Debt, $500,000,0 Current liabilities, $200,000; Long-term Debt, $800,000. O Current liabilities, $800,000; Long term Debt, $200,000. 4 O Current liabilities, $1,000,000. O Long-term debt, $1,000,000.DO NOT GIVE SOLUTION IN IMAGEAt year-end (December 31), Chan Company estimates its bad debts as 1% of its annual credit sales of $487,500. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $580 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off. Prepare Chan's journal entries for the transactions. View transaction list Journal entry worksheet 1 2 3 4 Record the estimated bad debts expense. Note: Enter debits before credits. Debit Date General Journal Credit Dec 31
