Ask Question
BusinessBusiness
30 August, 09:55

On May 1, Year 1, Benz's Sandwich Shop loaned $18,000 to Mark Henry for one year at 9 percent interest. Required a. What is Benz's interest income for Year 1? b. What is Benz's total amount of receivables at December 31, Year 1? c. How will the loan and interest be reported on Benz's Year 1 statement of cash flows? d. What is Benz's interest income for Year 2? e. What is the total amount of cash that Benz's will collect in Year 2 from Mark Henry? f. How will the loan and interest be reported on Benz's Year 2 statement of cash flows? g. What is the total amount of interest that Benz's earned on the loan to Mark Henry?

+5
Answers (1)
  1. 30 August, 10:51
    0
    a) $1080

    b) $19080

    c) Loan given | - $18000

    d) $540

    e) $19620

    f) loan | 18000

    Interest received | $1620

    g) $1620

    Explanation:

    a) Year 1 : a) Interest income = $18000*9%*8/12 = $1080

    b) The total receivable at december 31, Year = 18000+1080 = $19080

    c) Year 1 : Statement of cash flow

    Loan given | - $18000

    d) Interest income Year 2 = $18000*9%*4/12 = $540

    e) Total cash collect in 2017 = $18000+$1080 + $540 = $19620

    f) Cash flow from investing activities:

    loan | 18000

    Interest received | $1620

    g) Total interest earned = 18000*9% = $1620
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On May 1, Year 1, Benz's Sandwich Shop loaned $18,000 to Mark Henry for one year at 9 percent interest. Required a. What is Benz's interest ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
You have agreed to loan some money to a friend at a simple interest rate of 150% which is outrageous but still about half of the payday loan places!
Answers (1)
A 20-year maturity, 9% coupon bond paying coupons semiannually is callable in five years at a call price of $1,050. The bond currently sells at a yield to maturity of 8% (4% per half-year). a. What is the yield to call annually? (D
Answers (1)
Investment X offers to pay you $4,300 per year for 9 years, whereas Investment Y offers to pay you $6,100 per year for 5 years. a. If the discount rate is 6 percent, what is the present value of these cash flows?
Answers (1)
To develop a portfolio that provides the best return possible with a minimum risk, the linear programming model will have an objective function which a. maximizes the minimum return. b. maximizes return and minimizes risk. c.
Answers (1)
Imputed interest rules apply to term loans or demand loans in which the interest rate is less than the Applicable Federal Rate (AFR).
Answers (1)
New Questions in Business
Potanta is a company that manufactures herbal soaps. Over the years, the availability of aloe vera pulp, which is the keyingredient of the company's best-selling aloe vera soaps, has reduced.
Answers (1)
An advertiser enables target cost-per-acquisition (cpa) bidding and notices that conversions decrease. what might cause this?
Answers (1)
A trigger strategy is a strategy that: A. is not relevant to oligopolies. B. determines when to enter an industry. C. depends on an opponent's past decisions. D. tells a business to leave the industry because the price is below the AVC.
Answers (1)
What is the effect on the supply curve for skateboards if the government implements a tax on the manufacturing process?
Answers (1)
Cost of goods sold is: an asset account. a revenue account. an expense account. a permanent equity account.
Answers (1)
Home » Business » On May 1, Year 1, Benz's Sandwich Shop loaned $18,000 to Mark Henry for one year at 9 percent interest. Required a. What is Benz's interest income for Year 1? b. What is Benz's total amount of receivables at December 31, Year 1? c.
Sign Up Forgot Password?