{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

chpt 7 hw sol

# chpt 7 hw sol - Chapter 7 Homework Solutions Exercise 7-10...

This preview shows pages 1–4. Sign up to view the full content.

Chapter 7 Homework Solutions Exercise 7-10 Requirement 1 June 30, 2006 Note receivable ........................................................... 30,000 .............................................................. Sales revenue ......................................................................... 30,000 December 31, 2006 Interest receivable ....................................................... 900 ............................................. Interest revenue (\$30,000 x 6% x 6 / 12 ) ...................................................................................................................... 900 March 31, 2007 Cash [\$30,000 + (\$30,000 x 6% x 9 / 12 )] ............................ 31,350 ............................................. Interest revenue (\$30,000 x 6% x 3 / 12 ) ...................................................................................................................... 450 ................... Interest receivable (accrued at December 31) .............................................................................. 900 .......................................................... Note receivable ......................................................................... 30,000 Requirement 2 2006 income before income taxes would be understated by \$900 2007 income before income taxes would be overstated by \$900.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Exercise 7-11 Requirement 1 June 30, 2006 Note receivable (face amount) ....................................... 30,000 .......................... Discount on note receivable (\$30,000 x 8% x 9 / 12 ) .................................................................................... 1,800 ............................................. Sales revenue (difference) ......................................................................... 28,200 December 31, 2006 Discount on note receivable ...................................... 1,200 ............................................. Interest revenue (\$30,000 x 8% x 6 / 12 ) .................................................................................... 1,200 March 31, 2007 Discount on note receivable ...................................... 600 ............................................. Interest revenue (\$30,000 x 8% x 3 / 12 ) .................................................................................... 600 Cash ........................................................................... 30,000 ....................................... Note receivable (face amount) ......................................................................... 30,000 Requirement 2 \$ 1,800 interest for 9 months ÷ \$28,200 sales price = 6.38% rate for 9 months x 12 / 9 to annualize the rate _______ = 8.51% effective interest rate
Exercise 7-17 Step 1: Accrue interest earned.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern