Question

Hemple Co. maintains escrow accounts for various mortgage companies. Hemple collects the receipts and pays the bills on behalf of the customers. Hemple holds the escrow monies in interest-bearing accounts. They charge a 10% maintenance fee to the customers based on interest earned. Hemple reported the following account data:Escrow liability beginning of the year - $ 500,000
Escrow receipts during the year - 1,200,000
Real estate taxes paid during the year - 1.450,000
Interest earned during the year - 40,000

What amount represents the escrow liability balance on Hemple's books?
a. $290,000
b. $286,000
c. $214,000
d. $210,000

Answer 1

Answer:

B.

Explanation: