Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 4, Problem 4.16E
Exercise 4.16
LO 6, 7
Notes payable-interest accrual and payment Proco had an account payable of $42,000 due to Shirmoo, Inc., one of its suppliers. The amount was due to be paid on January 31. Proco did not have enough cash on hand then to pay the amount due, so Proco’s treasurer called Shirmoo’s treasurer and agreed to sign a note payable for the amount due. The note was dated page 124 February 1, had an interest rate of 7% per annum, and was payable with interest on May 31.
Required:
Use the horizontal model to show the effects of each of these transactions and adjustments for Proco on the following:
- February 1, to show’ that the account payable had been changed to a note payable.
- March 31, to accrue interest expense for February and March.
- May 31, to record payment of the note and all of the interest due to Shirmoo.
(Note: As an alternative to using the horizontal model, write the
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Exercise 9-21 (Static) Dishonoring a note LO P4
Following are transactions for Ridge Company.
March 21 Accepted a $9,500, 180-day, 8% note from Tamara Jackson in granting a time extension on her past-due account
receivable.
September 17 Jackson dishonored her note.
December 31 After trying several times to collect, Ridge Company wrote off Jackson's account against the Allowance for Doubtful
Accounts.
Calculate the interest amounts at September 17 and use the calculated value to prepare your journal entries.
Note: Use 360 days a year.
Complete this question by entering your answers in the tabs below.
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Journal
Use the calculated value to prepare your journal entries.
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Journal entry worksheet
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3
11.18 Outstanding deposits and unpresented cheques *
LO3
The following information has been extracted from the cash records of Wheeler Ltd and shows four independent situations.
Assume there were no direct bank debits or credits on the bank statement and that all outstanding deposits and
unpresented cheques in one month appeared on the bank statement in the following month.
1. The total of outstanding deposits on the 30 April bank reconiliation statement was $1875. During May, the company
made deposits of $40 200 to its bank account but the bank statement showed that only $39 840 was deposited during the
month.
2. The total of unpresented cheques on the 30 April bank reconciliation statement was $1440. During May, the total of
cheques issued was $29 175 but the bank statement showed that only $27 720 in cheques were presented during the
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3. During July, deposits recorded on the bank statement totalled $46 200, but deposits according to the company's records
were $43 950 and…
Exercise 7-12A (Algo) Notes receivable-accrued interest LO 7-5
On May 1, Year 1, Benz's Sandwich Shop loaned $14,000 to Mark Henry for one year at 9 percent interest.
Required:
a. What is Benz's interest income for Year 1?
b. What is Benz's total amount of receivables at December 31, Year 1?
c. How will the loan and interest be reported on Benz's Year 1 statement of cash flows?
d. What is Benz's interest income for Year 2?
e. What is the total amount of cash that Benz's will collect in Year 2 from Mark Henry?
f. How will the loan and interest be reported on Benz's Year 2 statement of cash flows?
g. What is the total amount of interest that Benz's earned on the loan to Mark Henry?
Note: For all requirements, round your answers to the nearest dollar amount.
a. Interest income
b. Receivables
c. Cash used in investing activities
d. Interest income
e. Cash
f.
f.
g. Interest earned
46°
Chapter 4 Solutions
Accounting: What the Numbers Mean
Ch. 4 - Prob. 4.1MECh. 4 - Mini-Exercise 4.2 LO 2, 6, 7 Record transactions...Ch. 4 - Prob. 4.3MECh. 4 - Prob. 4.4MECh. 4 - Exercise 4.5 LO 2. 6, 7 Record transactions and...Ch. 4 - Exercise 4.6 LO 2. 6, 7 Record transactions and...Ch. 4 - Exercise 4.7 LO 6 Write journal entries Write the...Ch. 4 - Exercise 4.8 LQ 6 Write journal entries Write the...Ch. 4 - Exercise 4.9 LO 2, 6, 7 Record transactions and...Ch. 4 - Exercise 4.10 LO 2. 6, 7 Record transactions and...
Ch. 4 - Exercise 4.11 LO 2. 6, 7 Record transactions and...Ch. 4 - Exercise 4.12 LO 2, 6, 7 Record transactions and...Ch. 4 - Exercise 4.13 LO 3 Calculate retained earnings On...Ch. 4 - Prob. 4.14ECh. 4 - Exercise 4.15 LO 6 . 7 Notes receivable-interest...Ch. 4 - Exercise 4.16 LO 6, 7 Notes payable-interest...Ch. 4 - Exercise 4.17 LO 6, 7 Effect of adjustments on net...Ch. 4 - Exercise 4.18 LO 6, 7 Effects of adjustments A...Ch. 4 - Exercise 4.19 LO 6 , 7 T-account analysis Answer...Ch. 4 - Exercise 4.20 LO 6, 7 Transaction analysis using...Ch. 4 - Problem 4.21 LO 2, 6, 7 Record transactions and...Ch. 4 - Prob. 4.22PCh. 4 - Prob. 4.23PCh. 4 - Problem 4.24 LO 6. 7 Calculate income from...Ch. 4 - Prob. 4.25PCh. 4 - Prob. 4.26PCh. 4 - Problem 4.27 LO 6. 7 Analyze several accounts...Ch. 4 - Prob. 4.28PCh. 4 - Case 4.29LO 6, 7Capstone analytical review of...Ch. 4 - Prob. 4.30C
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- → w How BE 8-5 Note receivable Obj. 6 Prefix Supply Company received a 120-day, 6% note for $500,000, dated April 12 from a customer on account. a. Determine the due date of the note. b. Determine the maturity value of the note. c. Journalize the entry to record the receipt of the payment of the note at maturity.arrow_forwardPROBLEM 1 Aljon Company reported the following as of December 31, 2021: Accounts receivables P100,000 Notes receivables 80,000 Allowance for doubtful accounts Installment receivables (normally receivable within 1 to 3 years) Customer's credit balances 27,000 150,000 20,000 Supplier's debit balances Advances to subsidiaries 10,000 35.000 Advances to suppliers 30.000 Advances to affiliates 40.000 Security deposit 85.000 Subscriptions receivable 22.000 How much is the total trade receivables as of December 31, 2021?arrow_forwardExercise 7-5 (Algo) Notes payable—discount basis LO 2 Skip to question [The following information applies to the questions displayed below.] On April 15, 2019, Powell Inc. obtained a six-month working capital loan from its bank. The face amount of the note signed by the treasurer was $255,400. The interest rate charged by the bank was 5.00%. The bank made the loan on a discount basis. Exercise 7-5 (Algo) Part c c. What is the amount of the current liability related to this loan to be shown in the June 30, 2019, balance sheet?arrow_forward
- PROBLEM 2 Harris Supply Co. has the following transactions related to notes receivable during the last 2 months of the year. Nov. 1 Loaned $90,000 cash to B. Woods on a 1-year, 7% note. Dec. 11 Sold goods to R.P. Mayrl, Inc. receiving a $4,500, 90-day, 4% note. 16 Received a $12,000, 6-month, 9% note to settle an open account from M. Kline. 31 Accrued interest revenue on all notes receivable. Instructions: Journalize the transactions for Harris Supply Co. (Omit cost of goods sold entries.)arrow_forwardDate May 17 May 21 Date May 17 Transaction amount REFLECTING What could Esmé have done to avoid this additional cost? May 21 $187.50 $104.19 Transaction emount $187.50 $104.19 REFLECTING Do all financial institutions charge the same interest rates for loans? Explain. 3. Esmé had three overdraft transactions in May. Each transaction cost $3, plus interest at 19%/yr, compounded daily. Her paycheque was deposited electronically on May 31. It covered all the overdrafts. a) Complete the chart to determine what Esmé paid. Time 15 d - d Time 15 d Total amount A=P(1 + d b) Suppose Esmé had a personal line of credit with interest at 9.5%/yr, compounded daily. Complete the chart. How much interest would she have paid? 1 = $ = $ Total amount A=P(1+1) Interest 1=A-P 1 = $ = $ - $187.50 Interest 1=A-P - $187.50 c) Should Esmé get a personal line of credit? Explain.arrow_forward
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