Reference no: EM132591346

Question - During Year 2, Calico Company experienced the following accounting events:

1. Provided $132,000 of services on account.

2. Collected $87,000 cash from accounts receivable.

3. Wrote off $3.000 of accounts receivable that were uncollectible.

4. Loaned $4,200 to an individual, Emma Gardner, in exchange for a note receivable.

5. Paid $94.000 cash for operating expenses.

6. Estimated that uncollectible accounts expense would be 2 percent of revenue earned on account. Recorded the year-end adjusting entry.

7. Recorded the year-end adjusting entry for accrued interest on the note receivable (see Event 4). Calico made the loan on August 1.

It had a six-month term and a 6 percent rate of interest.

Required -

a. Record the Year 2 events in ledger accounts under an accounting equation.

b. Determine net income for Year 2.

c. Determine net cash flow from operating activities for Year 2.

d. Determine the net realizable value of accounts receivable at December 31, Year 2.

e. What amount of interest revenue will Calico recognize on its note receivable in Year 3?