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Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.6% p.a. on positive balances and pay daily interest of 8% p.a. on negative (line of credit) balances. Overdraft interest is 15% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below. Click the icon to view the statement for the month of October. October Statement (c) Calculate the amount of interest charged on overdrafts. Transaction Description Balance Deposit Withdrawal Balance Date Overdraft interest = SO October 1 - 535.43 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Cheque 263 Cheque 264 Deposit Cheque 265 Cheque 266 6 524.00 - 1059.43 (d) Calculate the amount of service charge. 12 230.00 - 1289.43 18 1781.00 491.57 Service charge S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 23 93.00 398.57 28 227.00 171.57 (e) What is the account balance on October 31? 31 The account balance on October 31 is dollars. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Print Done

Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.6% p.a. on positive balances and pay daily interest of 8% p.a. on negative (line of credit) balances. Overdraft interest is 15% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below. Click the icon to view the statement for the month of October. October Statement (c) Calculate the amount of interest charged on overdrafts. Transaction Description Balance Deposit Withdrawal Balance Date Overdraft interest = SO October 1 - 535.43 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Cheque 263 Cheque 264 Deposit Cheque 265 Cheque 266 6 524.00 - 1059.43 (d) Calculate the amount of service charge. 12 230.00 - 1289.43 18 1781.00 491.57 Service charge S (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 23 93.00 398.57 28 227.00 171.57 (e) What is the account balance on October 31? 31 The account balance on October 31 is dollars. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Print Done

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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part D E

Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.6% p.a. on positive balances and pay daily interest of 8% p.a. on negative (line of credit) balances. Overdraft interest is 15% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below. E Click the icon to view the statement for the month of October. October Statement (c) Calculate the amount of interest charged on overdrafts. Transaction Description Deposit Withdrawal Balance Date Overdraft interest = S October 1 Balance - 535.43 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 6. Cheque 263 524.00 - 1059.43 (d) Calculate the amount of service charge. Cheque 264 Deposit 12 230.00 - 1289.43 18 1781.00 491.57 Service charge = $ Cheque 265 Cheque 266 23 93.00 398.57 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 28 227.00 171.57 (e) What is the account balance on October 31? 31 The account balance on October 31 is dollars. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Print Done
Transcribed Image Text:Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.6% p.a. on positive balances and pay daily interest of 8% p.a. on negative (line of credit) balances. Overdraft interest is 15% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below. E Click the icon to view the statement for the month of October. October Statement (c) Calculate the amount of interest charged on overdrafts. Transaction Description Deposit Withdrawal Balance Date Overdraft interest = S October 1 Balance - 535.43 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 6. Cheque 263 524.00 - 1059.43 (d) Calculate the amount of service charge. Cheque 264 Deposit 12 230.00 - 1289.43 18 1781.00 491.57 Service charge = $ Cheque 265 Cheque 266 23 93.00 398.57 (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 28 227.00 171.57 (e) What is the account balance on October 31? 31 The account balance on October 31 is dollars. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Print Done
Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.6% p.a. on positive balances and pay daily interest of 8% p.a. on negative (line of credit) balances. Overdraft interest is 15% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below. E Click the icon to view the statement for the month of October. ..... (a) Calculate the amount of interest earned. Total interest earned = $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) Calculate the amount of interest charged on the line of credit. Total line of credit interest charged = $
Transcribed Image Text:Suppose your business has secured a line of credit and receives the accompanying statement of account for the month of October. The limit on your line of credit is $1000.00. You receive daily interest of 1.6% p.a. on positive balances and pay daily interest of 8% p.a. on negative (line of credit) balances. Overdraft interest is 15% p.a. on the daily amount exceeding your line of credit limit. There is a service charge of $5.00 for each transaction causing an overdraft or adding to an overdraft. Use this information to complete parts (a) through (e) below. E Click the icon to view the statement for the month of October. ..... (a) Calculate the amount of interest earned. Total interest earned = $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) Calculate the amount of interest charged on the line of credit. Total line of credit interest charged = $
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