Water Closet Co. wholesales bathroom fixtures. During the current year ending December 31, Water Closet received the following notes:   Date of Note Face Amount Interest Rate Term 1. March 6 $75,000   4 % 60 days   2. April 7 40,000   6   45 days   3. August 12 36,000   5   120 days   4. October 22 27,000   8   30 days   5. November 19 48,000   3   90 days   6. December 15 72,000   5   45 days   Instructions Assume 360 days in a year. 1.  Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. Note (a) Due Date (b) Interest Due at Maturity 1.   $fill in the blank 2   2.   fill in the blank 4   3.   fill in the blank 6   4.   fill in the blank 8   5.   fill in the blank 10   6.   fill in the blank 12   2.  Illustrate the effects on the accounts and financial statements of the receipt of the amount due on Note 3 at its maturity. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.   Financial Statement Effects       Balance Sheet     Assets = Liabilities + Stockholders' Equity     +   =   +   Dec. 10. fill in the blank 17   fill in the blank 18   fill in the blank 19   fill in the blank 20   Statement of Cash Flows   Income Statement       fill in the blank 22     fill in the blank 24       3.  Compute the accrued interest on December 31 for Notes 5 and 6. Note 5: $fill in the blank 25 Note 6: $fill in the blank 26 4.  Illustrate the effects on the accounts and financial statements of the adjustment for accrued interest on December 31 for Notes 5 and 6. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.   Financial Statement Effects       Balance Sheet     Assets = Liabilities + Stockholders' Equity     +   =   +   Dec. 31. fill in the blank 31   fill in the blank 32   fill in the blank 33   fill in the blank 34   Statement of Cash Flows   Income Statement       fill in the blank 36     fill in the blank 38

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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Water Closet Co. wholesales bathroom fixtures. During the current year ending December 31, Water Closet received the following notes:

  Date of Note Face Amount Interest Rate Term
1. March 6 $75,000   4 % 60 days  
2. April 7 40,000   6   45 days  
3. August 12 36,000   5   120 days  
4. October 22 27,000   8   30 days  
5. November 19 48,000   3   90 days  
6. December 15 72,000   5   45 days  

Instructions

Assume 360 days in a year.

1.  Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number.

Note (a) Due Date (b) Interest Due
at Maturity
1.
 
$fill in the blank 2  
2.
 
fill in the blank 4  
3.
 
fill in the blank 6  
4.
 
fill in the blank 8  
5.
 
fill in the blank 10  
6.
 
fill in the blank 12  

2.  Illustrate the effects on the accounts and financial statements of the receipt of the amount due on Note 3 at its maturity. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

  Financial Statement Effects
 
    Balance Sheet  
  Assets = Liabilities + Stockholders' Equity  
 
+
 
=
 
+
 
Dec. 10. fill in the blank 17   fill in the blank 18   fill in the blank 19   fill in the blank 20
  Statement of Cash Flows   Income Statement  
 
 
fill in the blank 22  
 
fill in the blank 24  
 
 

3.  Compute the accrued interest on December 31 for Notes 5 and 6.

Note 5: $fill in the blank 25
Note 6: $fill in the blank 26

4.  Illustrate the effects on the accounts and financial statements of the adjustment for accrued interest on December 31 for Notes 5 and 6. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

  Financial Statement Effects
 
    Balance Sheet  
  Assets = Liabilities + Stockholders' Equity  
 
+
 
=
 
+
 
Dec. 31. fill in the blank 31   fill in the blank 32   fill in the blank 33   fill in the blank 34
  Statement of Cash Flows   Income Statement  
 
 
fill in the blank 36  
 
fill in the blank 38  
 
 
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