Malco Enterprises issued $27,000 of common stock when the company was started. In addition, Malco borrowed $53,000 from a local bank on July 1, Year 1. The note had a 5 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $91,200 of revenue on account in Year 1 and $102,200 of revenue on account in Year 2. Cash collections of accounts receivable were $78,300 in Year 1 and $88,500 in Year 2. Malco paid $54,300 of other operating expenses in Year 1 and $62,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Required Based on this information given above, record the events in the accounting equation and answer the following questions. Note: Enter any decreases to account balances with a minus sign. MALCO ENTERPRISES Effect of Events on the Financial Statements Balance Sheet Assets Liabilities + Stockholders' Equity Events Cash + Accounts Receivable Notes Payable Interest Payable Common Stock + Retained Earnings Year 1 1. Common Stock 2. Loan 3. Revenue 4. Collections of Accounts Receivable 5. Operating Expenses 6. Interest Accrued Ending Balance Year 2 Beginning Balance 1. Revenue 2. Collections of Accounts Receivable 3. Operating Expenses - 4. Interest Accrued 5. Payment of Interest & Principles Ending Balance 0+ 0 = 0+ 0+ 0+ 0 0 0 0 0 0 0 0+ 0+ 0+ 0+ 0
Malco Enterprises issued $27,000 of common stock when the company was started. In addition, Malco borrowed $53,000 from a local bank on July 1, Year 1. The note had a 5 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized $91,200 of revenue on account in Year 1 and $102,200 of revenue on account in Year 2. Cash collections of accounts receivable were $78,300 in Year 1 and $88,500 in Year 2. Malco paid $54,300 of other operating expenses in Year 1 and $62,000 of other operating expenses in Year 2. Malco repaid the loan and interest at the maturity date. Required Based on this information given above, record the events in the accounting equation and answer the following questions. Note: Enter any decreases to account balances with a minus sign. MALCO ENTERPRISES Effect of Events on the Financial Statements Balance Sheet Assets Liabilities + Stockholders' Equity Events Cash + Accounts Receivable Notes Payable Interest Payable Common Stock + Retained Earnings Year 1 1. Common Stock 2. Loan 3. Revenue 4. Collections of Accounts Receivable 5. Operating Expenses 6. Interest Accrued Ending Balance Year 2 Beginning Balance 1. Revenue 2. Collections of Accounts Receivable 3. Operating Expenses - 4. Interest Accrued 5. Payment of Interest & Principles Ending Balance 0+ 0 = 0+ 0+ 0+ 0 0 0 0 0 0 0 0+ 0+ 0+ 0+ 0
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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Ashvinn
Transcribed Image Text:Malco Enterprises issued $27,000 of common stock when the company was started. In addition, Malco borrowed $53,000 from a local
bank on July 1, Year 1. The note had a 5 percent annual interest rate and a one-year term to maturity. Malco Enterprises recognized
$91,200 of revenue on account in Year 1 and $102,200 of revenue on account in Year 2. Cash collections of accounts receivable were
$78,300 in Year 1 and $88,500 in Year 2. Malco paid $54,300 of other operating expenses in Year 1 and $62,000 of other operating
expenses in Year 2. Malco repaid the loan and interest at the maturity date.
Required
Based on this information given above, record the events in the accounting equation and answer the following questions.
Note: Enter any decreases to account balances with a minus sign.
MALCO ENTERPRISES
Effect of Events on the Financial Statements
Balance Sheet
Assets
Liabilities
+
Stockholders' Equity
Events
Cash
+
Accounts
Receivable
Notes
Payable
Interest
Payable
Common
Stock
+
Retained
Earnings
Year 1
1. Common Stock
2. Loan
3. Revenue
4. Collections of Accounts Receivable
5. Operating Expenses
6. Interest Accrued
Ending Balance
Year 2
Beginning Balance
1. Revenue
2. Collections of Accounts Receivable
3. Operating Expenses -
4. Interest Accrued
5. Payment of Interest & Principles
Ending Balance
0+
0 =
0+
0+
0+
0
0
0
0
0
0
0
0+
0+
0+
0+
0
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