Pink Stamp Chop Trading provided the following interest expense account. Interest expense account (a) 2020 (b) Jan 1 Aug 4 Oct 9 Dec 31 Interest payable Cash at bank Prepaid interest Income summary Dr $ 745 Cr $ 300 120 325 The business hopes to increase its cash balance for expansion but does not wish to incur additional interest expense on long-term borrowings. It is considering other options of increasing its cash balance without borrowing from the bank. REQUIRED Bal $ 300 Cr 445 Dr 325 Dr Interpret the entries on the following dates. (i) 1 January (ii) 4 August (iii) 9 October Suggest and explain four ways in which a business can increase its cash balance aside from securing long-term borrowings.

Pink Stamp Chop Trading provided the following interest expense account. Interest expense account (a) 2020 (b) Jan 1 Aug 4 Oct 9 Dec 31 Interest payable Cash at bank Prepaid interest Income summary Dr $ 745 Cr $ 300 120 325 The business hopes to increase its cash balance for expansion but does not wish to incur additional interest expense on long-term borrowings. It is considering other options of increasing its cash balance without borrowing from the bank. REQUIRED Bal $ 300 Cr 445 Dr 325 Dr Interpret the entries on the following dates. (i) 1 January (ii) 4 August (iii) 9 October Suggest and explain four ways in which a business can increase its cash balance aside from securing long-term borrowings.

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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