Reference no: EM13349326
Question 1
On 1st January, 2008, ABC Company borrowed $200,000 from the bank. The loan is a 10-year note payable that needs semi-annual payments of $18,000 every June 30 and 31st December, starting June 30, 2008.
Consider the loan has a 10% interest rate, compounded semi-annually.
Determine the amount of the note payable at December 31, 2008 that would be classified as a existing liability.
Question 2
The balance sheets for ABC Company at 1st January, 2007 and 31st December, 2007 are given below:
January 1, 2007 December 31, 2007
ASSETS
Cash 35,000 ?
Accounts receivable ? 97,000
Inventory ? 57,000
Land 80,000 90,000
Equipment 180,000 230,000
Accumulated depreciation <27,000> <41,000>
LIABILITIES + EQUITY
Accounts payable 26,000 51,000
Short-term notes payable 40,000 45,000
Income taxes payable 11,000 ?
Common stock ? 135,000
Retained earnings 213,000 253,000
The given information was taken from ABC Company's 2007 statement of cash flows:
Total cash flow from operating activities 85,000
Total cash flow from investing activities <60,000>
Total cash flow from financing activities <5,000>
Total change in cash 20,000
During 2007, ABC Company reported a cost of goods sold of $170,000, cash paid to suppliers for purchases of inventory of $118,000, and a total income of $57,000.
Determine the balance in the income taxes payable account at 31st December, 2007.