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netineya [11]
3 years ago
6

On May 1, Year 1, Benz's Sandwich Shop loaned $10,000 to Mark Henry for one year at 6 percent interest.

Business
1 answer:
ankoles [38]3 years ago
8 0

a. Benz's Sandwich Shop interest income for Year 1 is equal to $400.

b. Benz's Sandwich Shop total receivables at December 31, Year 1 is equal to $10,400.

c. The loan receivable will be reported on Benz's Sandwich Shop Statement of Cash Flows under operating activities as an outflow of resources in the amount of $10,000.

d. Benz's Sandwich Shop interest income for Year 2 is equal to $200.

e. The total amount of cash that Benz's Sandwich Shop will collect in Year 2 from Mark Henry is $10,600.

f. On Benz's Year 2 Statement of Cash Flows, the loan and interest will be reported under Operating Activities as inflows in the total amount of $10,600.

g. The total amount of interest that Benz's Shop earned on the loan to Mark Henry is $600 ($10,000 x 6%).

Data and Calculations:

Amount of loan = $10,000

Interest rate = 6%

Months for Year 1 = 8 months (12 - 4)

Interest income for Year 1= $400 ($10,000 x 6% x 8/12)

Loan Receivable = $10,000

Interest Receivable = $400

Total receivable for Year 1 = $10,400 ($10,000 + $400)

Interest Income for Year 2 = $200 ($10,000 x 6% x 4/12)

Total Interest Income = $600 ($10,000 x 6%)

Thus, the interest is the income that Benz's receives for lending $10,000 to Mark Henry for a period of one year at 6%.

Learn more: brainly.com/question/19417091

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lower; higher.

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Generally, installment sales are permitted or allowed by the tax laws in a country. Typically, they are recognized in the year of sale for the purpose of financial reporting. Also, installment sales for any goods or services are to be reported in the tax return, at a later time when cash is received from the customer (buyer).

This results in a deferred tax liability because taxable income is lower than financial income in the year of sale, and higher than financial income in later years when collected.

7 0
2 years ago
When the money market is drawn with the value of money on the vertical axis, if the Federal Reserve buys bonds, then the money s
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Answer:

The correct answer is:  shifts rightward, causing the price level to rise.

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Mary begins an internship at a small company that makes touchscreens for imported smartphones. Her first assignment is to estima
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Answer:

Mary should answer that more than half of the boxes not be rejected.

Explanation:

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Probability of rejecting a box:

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The focus groupis meeting on Tuesday.The policy is too old; itneeds to be revised.The management teamwants to hire new warehouse
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Answer:

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7 0
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