Note receivable: Note receivable refers to a written promise by a debtor for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to the lender or creditor. Notes receivable is an asset of a business. Interest on note: Interest on note is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender. The amount of interest on notes receivables can be calculated using the following formula: Interest = Principal × Rate of interest × Interest period The amount of interest revenue earned during 2016, for each of the notes receivable.
Note receivable: Note receivable refers to a written promise by a debtor for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to the lender or creditor. Notes receivable is an asset of a business. Interest on note: Interest on note is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender. The amount of interest on notes receivables can be calculated using the following formula: Interest = Principal × Rate of interest × Interest period The amount of interest revenue earned during 2016, for each of the notes receivable.
Solution Summary: The author explains how the amount of interest on notes receivables can be calculated using the following formula:
Note receivable refers to a written promise by a debtor for the amounts to be received within a stipulated period of time. This written promise is issued by a debtor or borrower to the lender or creditor. Notes receivable is an asset of a business.
Interest on note:
Interest on note is the amount charged on the principal value of note for the privilege of borrowing money. Interest is to be paid by the borrower and to be received by the lender.
The amount of interest on notes receivables can be calculated using the following formula:
Interest = Principal×Rate of interest×Interest period
The amount of interest revenue earned during 2016, for each of the notes receivable.
The second step, when using dollar-value LIFO retail method for inventory, is to determine the estimated:
Multiple Choice
Cost of goods sold for the current year.
Ending inventory at cost.
Ending inventory at current year retail prices.
Ending inventory at base year retail prices.
Data related to the inventories of Kimzey Medical Supply are presented below:
Surgical Equipment
Surgical Supplies
Rehab Equipment
Rehab Supplies
Selling price
$ 315
$ 175
$ 395
$ 220
Cost
225
145
305
217
Replacement cost
295
135
290
213
Costs to sell
52
16
36
32
Normal gross profit ratio
40%
40%
40%
40%
In applying the lower of cost or market rule, the inventory of surgical supplies would be valued at:
Multiple Choice
$155.
$145.
$135.
$119.
Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:
Skis
Boots
Apparel
Supplies
Selling price
$ 168,000
$ 163,000
$ 109,000
$ 66,000
Cost
140,000
142,000
70,850
42,900
Replacement cost
131,000
128,000
90,850
38,900
Sales commission
10%
10%
10%
10%
In applying the lower of cost or net realizable value rule, the inventory of skis would be valued at:
Multiple Choice
$151,200.
$131,000.
$140,000.
$117,600.
Chapter 8 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)
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