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long-term loans, increasing the loan balance from $800 to $1,600. What is a reasonable forecast of the amount of interest expense in 20X2?

long-term loans, increasing the loan balance from $800 to $1,600. What is a reasonable forecast of the amount of interest expense in 20X2?

FINANCIAL ACCOUNTING
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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Question 50 of 50 Among the items in the financial statements for 20X1, Kadan Company reported the information below. (This is not a complete list of all of the financial statement items.) Accounts receivable $200 Inventory $400 Property, plant, and equipment $1,000 Accounts payable $100 • Long-term loans payable $800 ● ● ● ● Sales $10,000 ● • Cost of goods sold $7,500 Depreciation expense $250 • Interest expense $60 ● ● In 20X2, sales are expected to increase from $10,000 to $13,000. On January 1, 20X2, Kadan plans to purchase new property, plant, and equipment, increasing the balance from $1,000 to $1,500. Also on January 1, 20X2, Kadan plans to obtain new long-term loans, increasing the loan balance from $800 to $1,600. What is a reasonable forecast of the amount of interest expense in 20X2?
Transcribed Image Text:Question 50 of 50 Among the items in the financial statements for 20X1, Kadan Company reported the information below. (This is not a complete list of all of the financial statement items.) Accounts receivable $200 Inventory $400 Property, plant, and equipment $1,000 Accounts payable $100 • Long-term loans payable $800 ● ● ● ● Sales $10,000 ● • Cost of goods sold $7,500 Depreciation expense $250 • Interest expense $60 ● ● In 20X2, sales are expected to increase from $10,000 to $13,000. On January 1, 20X2, Kadan plans to purchase new property, plant, and equipment, increasing the balance from $1,000 to $1,500. Also on January 1, 20X2, Kadan plans to obtain new long-term loans, increasing the loan balance from $800 to $1,600. What is a reasonable forecast of the amount of interest expense in 20X2?
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