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 5, Problem 5.16E
Exercise 5.16
LO 6
Notes receivable-interest accrual and collection Husemann Co.’s assets include notes receivable from customers. During fiscal 2016, the amount of notes receivable averaged $277,500, and the interest rate of the notes averaged 5.2%.
Required:
- Calculate the amount of interest income earned by Husemann Co. during fiscal 2016 and show in the horizontal model or write a
journal entry that accrues the interest income earned from the notes. - If the balance in the Interest Receivable account increased by $3,500 from the beginning to the end of the fiscal year, how much interest receivable was collected during the fiscal year? Use the horizontal model, a T-account, or write the journal entry to show the collection of this amount.
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QUESTION 16
Con-yay & JZ Incorporated has an average collection period (accounts receivable/daily credit sales) of 74 days. What is the accounts receivable
turnover ratio (credit sales/accounts receivable) for Smart and Smiley? You may use a 360-day year.
a. 4.86
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c. 2.66
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ezto.mi
Calculate the monthly payment by table lookup and formula. (Answers will not be exact due to rounding of percents in table lookup.).
(Use 13% for table lookup.). (Use the loan amortization table) (Round your answers to the nearest cent.)
Number of
Total of monthly
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$5,849.76
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monthly
payments
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of a used car
$5,793
Down
charge
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financed
APR
payment
$1, 283
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13%
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es
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By formula
Date
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.
Chapter 5 Solutions
Accounting: What the Numbers Mean
Ch. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Mini-Exercise 5.3 LO 5 Accounts receivable, bad...Ch. 5 - Mini-Exercise 5.4 LO 5 Bad debts...Ch. 5 - Mini-Exercise 5.5 LO 7, 8 Cost flow...Ch. 5 - Mini-Exercise 5.6 LO 7, 8 Cost flow...Ch. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10E
Ch. 5 - Exercise 5.11 LO 5 Bad debts analysis-Allowance,...Ch. 5 - Exercise 5.12 LO 5 Bad debts analysis-Allowance...Ch. 5 - Exercise 5.13 LO 5 Cash discounts-ROI Annual...Ch. 5 - Prob. 5.14ECh. 5 - Exercise 5.15 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.16 LO 6 Notes receivable-interest...Ch. 5 - Exercise 5.17 LO 7, 8 LIFO versus FIFO-matching...Ch. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Prob. 5.20ECh. 5 - Exercise 5.21 LO 5, 6, 8 Transaction...Ch. 5 - Exercise 5.22 LO 5. 8, 10 Transaction...Ch. 5 - Exercise 5.23 LO 5, 6, 7 Transaction...Ch. 5 - Exercise 5.24 LO 7, 8, 10 Transaction...Ch. 5 - Prob. 5.25PCh. 5 - Prob. 5.26PCh. 5 - Problem 5.27 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.28 LO 5 Bad debts analysis-Allowance...Ch. 5 - Problem 5.29 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.30 LO 5 Analysis of accounts receivable...Ch. 5 - Problem 5.31 LO 7, 8 Cost flow assumptions-FIFO...Ch. 5 - Problem 5.32 LO 7, 8 Cost flow assumptions-FIFO,...Ch. 5 - Prob. 5.33PCh. 5 - Prob. 5.34PCh. 5 - Problem 5.35 LO 7 Effects of inventory errors If...Ch. 5 - Prob. 5.36PCh. 5 - Case 5.37 LO 5, 7, 8 Focus company-accounts...Ch. 5 - Case 5.38
LO 5, 7
Comparative analysis of current...
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