Question

You and several classmates are studying for the next accounting examination. They ask you to answer the following questions: (Round answers to 0 decimal places, e.g. $62,482.)
If cash is borrowed on a $60,000, 9-month, 10% note on August 1, how much interest expense would be incurred by December 31?
The cash register total including sales taxes is $42,000, and the sales tax rate is 5%. What is the sales taxes payable?
If $42,000 is collected in advance on November 1 for 6-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31?

Answer 1

Answer:

Sry that i could answer the question but i hope u have a great day.

Explanation:

Answer 2

Answer:

If cash is borrowed on a $60,000, 9-month, 10% note on August 1, how much interest expense would be incurred by December 31?

accrued interest expense = $60,000 x 10% x 5/12 = $2,500

The cash register total including sales taxes is $42,000, and the sales tax rate is 5%. What is the sales taxes payable?

100%X + 5%X (sales tax) = $42,000

105%X = $42,000

X = $42,000 / 105% = $40,000

sales tax = total invoice - X = $42,000 - $40,000 = $2,000

If $42,000 is collected in advance on November 1 for 6-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31?

accrued subscription revenue = $42,000 x 2/6 = $14,000