Answer:
Amount in $
Dr. Cr.
Salaries Expense 1,300
Salaries Payable 1,300
Salaries to be paid in august
Bank 20,000
Long term loan 20,000
Loan received from bank on a 10 year note
Interest Expense 200
Interest payable 200
Expense on loan for 10 years ( 20,000 *.12*1/12)
Revenue 2,400
Receivable 2,400
Unrecorded revenue
Explanation:
1. Salaries are payable in august so a payable will be recorded for the amount. and an expense will be booked for the month.
2. Since this loan is for a period of more than 12 months so it will be treated as long term and interest on it will be calculated as mentioned above.
3. Unrecorded revenue will be recorded at mentioned above.
Answer: option C
Explanation: Cash flow can be categorized as inflow and outflow. Inflow can be defined as the money coming in the business like revenue. Cash outflow is money leaving the business like in form of expenditures.
Excess of cash inflow over cash outflow results in positive cash flows and vice- versa.
a. Debt is a source of capital hence its issuance will result in inflow of money.
b. Company will have to spend money for repurchasing the stock therefore it will be a cash outflow.
c. selling of assets will bring money to the firm,hence,cash inflow.
Thus, occurrence of either A or C can result in increase in cash flow.
Answer:
The effective rate on the bank loan is 27%
Explanation:
The effective rate of Interest
= ($11,800/$302,000)*(360Days/52days)
= 0.039*6.92
=27%
B if u read the sentence all in one it makes sense