Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local bank on July 1, Year 1. The note had a 6 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $72,500 of revenue on account in Year 1 and $85,200 of revenue on account in Year 2. Cash collections of accounts receivable were $61,300 in Year 1 and $71,500 in Year 2. Malco paid $39,000 of other operating expenses in Year 1 and $45,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. What amount of interest expense would be reported on the Year 2 income statement? What amount of cash flows from operating activities would be reported on the Year 2 cash flow statement? What amount of assets would be reported on the December 31, Year 2, balance sheet?
Malco Enterprises issued $10,000 of common stock when the company was started. In addition, Malco borrowed $36,000 from a local bank on July 1, Year 1. The note had a 6 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $72,500 of revenue on account in Year 1 and $85,200 of revenue on account in Year 2. Cash collections of
- What amount of interest expense would be reported on the Year 2 income statement?
- What amount of
cash flows from operating activities would be reported on the Year 2 cash flow statement? - What amount of assets would be reported on the December 31, Year 2,
balance sheet ?
A balance sheet is a financial statement that presents a snapshot of a company's financial position at a specific point in time. It shows the company's assets, liabilities, and equity, and provides information on how these items are financed. The balance sheet follows the basic accounting equation: assets = liabilities + equity. This means that the total assets of a company must be equal to the sum of its liabilities and equity.
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