Determine interest expense on the 2012 income statement

Assignment Help Financial Accounting

Reference no: EM134168

Question :

Norman Co. borrowed $15,000 from the local bank on 1^st April, 2012, when the company was started. The note had an 8 % annual interest rate and a one-year term to maturity. Norman Co. identifies $42,000 of revenue on account in 2012 and $56,000 of revenue on account in 2013. Cash collections from accounts receivable were $38,000 in 2012 and $58,000 in 2013. Norman Co. paid $26,000 of salaries expense in 2012 and $32,000 of salaries expense in 2013. Norman Co. paid the interest and loan at the maturity date.

Required

a. Classify the information in accounts under an accounting equation.

b. Evaluate net cash flow from operating activities would be reported on the 2012 cash flow statement?

c. Determine interest expense would be reported on the 2012 income statement?

d. What amount of net liabilities would be reported on the 31^st December, 2012, balance sheet?

e. Evaluate retained earnings would be reported on the 31^st December, 2012, balance sheet?

f. Evaluate cash flow from financing activities would be reported on the 2012 statement of cash flows?

g. Evaluate interest expense would be reported on the 2013 income statement?

h. Determine cash flows from operating activities would be reported on the 2013 cash flow statement?

I. What amount of assets would be reported on the 31^st December, 2013, balance sheet?

Reference no: EM134168

Questions Cloud

Effect of accrued interest on financial statements : Evaluate interest expense would be reported on the 2012 income statement? Determine total liabilities would be reported on the 31 st December, 2012, balance sheet?

Prepare the transaction data in accounts : Prepare the transaction data in accounts under an accounting equation. Purpose an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flow for 2012 and 2013.

Evaluate the number of pounds of material : Evaluate the number of pounds of material A the company must purchase during the year.

Purpose a pension worksheet for the pension plan : Purpose a pension worksheet for the pension plan for 2013 and 2014.

Determine interest expense on the 2012 income statement : Evaluate net cash flow from operating activities would be reported on the 2012 cash flow statement? Determine interest expense would be reported on the 2012 income statement?

Evaluate the regional managers ethical responsibility : Evaluate the regional manager's ethical responsibility in this scenario? Describe and support your position with evidence from the text.

What are the equivalent units for conversion : What are the equivalent units for conversion and material using the weighted average technique?

Determine the following amount of materials price variance : Determine the following amount of materials price variance to be prorated to complete goods inventory at Dec. 31

Evaluate bugaboos plant-wide factory overhead rate : Evaluate Bugaboo's plant-wide factory overhead rate for May. Determine May's product cost for each type of cookie.

User Account

All Pages