Please do both income and balance sheet! Boyd Company has a line of credit with State Bank. Boyd can borrow up to $500,000 at any time over the course of the Year 1calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed andrepaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowedor 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 theoutstanding monthly balance. For example, Boyd pays 6 percent (5 percent + 1 percent) annual interest on $70,000 for the month ofJanuary.Prime Ratefor theMonth5%Amount BorrowedMonthJanuaryFebruaryMarchApril through OctoberNovemberDecemberor (Repaid)$ 70,00050,000(42,000)No change(30,000)(20,000)No changeBoyd earned $35,000 of cash revenue during Year 1.RequiredPrepare an income statement and balance sheet for Year 1.Complete this question by entering your answers in the tabs below.IncomeBalance SheetStatementPrepare an income statement for Year 1. (Do not round intermediate calculations.)BOYD COMPANY

Concept of Working capital finance Bank finance - Credit Line from Bank Interest Calculation Profit…

Answered: Boyd earned $35,000 of cash revenue…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please do both income and balance sheet!

Boyd Company has a line of credit with State Bank. Boyd can borrow up to $500,000 at any time over the course of the Year 1
calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and
repaid during Year 1. Boyd agreed to pay interest at an annual rate equal to 1 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, Boyd pays 6 percent (5 percent + 1 percent) annual interest on $70,000 for the month of
January.
Prime Rate
for the
Month
5%
Amount Borrowed
Month
January
February
March
April through October
November
December
or (Repaid)
$ 70,000
50,000
(42,000)
No change
(30,000)
(20,000)
No change
Boyd earned $35,000 of cash revenue during Year 1.
Required
Prepare an income statement and balance sheet for Year 1.
Complete this question by entering your answers in the tabs below.
Income
Balance Sheet
Statement
Prepare an income statement for Year 1. (Do not round intermediate calculations.)
BOYD COMPANY

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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