If cash is borrowed on a $57,600, 11-month, 10% note on August 1, how much interest expense would be incurred by December 31? $enter a dollar amount 2. The cash register total including sales taxes is $44,520, and the sales tax rate is 5%. What is the sales taxes payable? $enter a dollar amount 3. If $44,520 is collected in advance on November 1 for 5-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31? $enter a dollar amount

Question

Business

Jimena Maynard

25 December, 21:15

If cash is borrowed on a $57,600, 11-month, 10% note on August 1, how much interest expense would be incurred by December 31? $enter a dollar amount 2. The cash register total including sales taxes is $44,520, and the sales tax rate is 5%. What is the sales taxes payable? $enter a dollar amount 3. If $44,520 is collected in advance on November 1 for 5-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31? $enter a dollar amount

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Answers (1)

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Giovanny Gentry · Answer 1

1. $2,400

2. $2,120

3. $17,808

Explanation:

1. The computation of the interest expense is shown below:

= Total amount borrowed * interest rate * number of months : total months in a year

= $57,600 * 10% * 5 months : 12 months

= $2,400

The five months is calculated from August 1 to December 31

2. The computation of the sales taxes payable is shown below":

= Sales tax * sale tax rate : 100 + sale tax rate

= $44,520 * 5% : 105%

= $2,120

3. The computation of the amount of subscription revenue recognized is shown below:

= Total advance collected * number of months : given months

= $44,520 * 2 months : 5 months

= $17,808

The two months is calculated from November 1 to December 31