Cambridge College

Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2013. The note, along with interest at 10%, is due on July 1, 2013. On February 28, 2013, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 12%. Required: Prepare the journal entries required on February 28, 2013, to accrue interest and to record the discounting (round all calculations to the nearest dollar) for Selkirk. Assume that the discounting is accounted for as a sale.

The current asset section of the Moorcroft Outboard Motor Company’s balance sheet reported the following amounts: Required: Determine net sales for 2013.

Question: Harrison Company maintains a checking account at the First National City Bank. The bank provides a bank statement along with canceled checks on the last day of each month. The July 2013 bank statement included the following information: The company’s general ledger account had a balance of $38,918 at the end of July. Deposits outstanding totaled $6,300 and all checks written by the company were processed by the bank except for those totaling $8,420. In addition, a $2,000 July de...

During 2013, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returns of $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all sales will be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns.

On March 31, Dower Publishing discounted a $30,000 note at a local bank. The note was dated February 28 and required the payment of the principal amount and interest at 6% on May 31. The bank’s discount rate is 8%. How much cash will Dower receive from the bank on March 31?

Camden Hardware’s credit sales for the year were $320,000. Accounts receivable at the beginning and end of the year were $50,000 and $70,000, respectively. Calculate the accounts receivable turnover ratio and the average collection period for the year.

Janet Taylor Casual Wear has $75,000 in a bank account as of December 31, 2011. If the company plans on depositing $4,000 in the account at the end of each of the next 3 years (2012, 2013, and 2014) and all amounts in the account earn 8% per year, what will the account balance be at December 31, 2014? Ignore the effect of income taxes. a. $ 87,000 b. $ 88,000 c. $ 96,070 d. $107,500

Johnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently. 1. On June 30, 2013, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $10,000 on the purchase date and the balance in five annual installments of $8,000 on each June 30 beginning June 30, 2014. Assuming that an interest rate of 10% properly reflects the time value of money in this situation, at what amount should Johnstone...

On January 1, 2013, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $25,000 each, and will be paid on December 31, 2013, 2014, and 2015. The last three are to be $40,000 each and will be paid on December 31, 2016, 2017, and 2018. Montgomery borrowed other money at a 10% annual rate. Required: 1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2013? 2. How much interest expense...

Benning Manufacturing Company is negotiating with a customer for the lease of a large machine manufactured by Benning. The machine has a cash price of $800,000. Benning wants to be reimbursed for financing the machine at an 8% annual interest rate. Required: 1. Determine the required lease payment if the lease agreement calls for 10 equal annual payments beginning immediately. 2. Determine the required lease payment if the first of 10 annual payments will be made one year from the date of the...