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During Year 2, Calico Company experienced the following accounting events: 1. Provided $120,000 of services on account. 2. Collected $90,000 cash from accounts receivable.
During Year 2, Calico Company experienced the following accounting events: 1. Provided $120,000 of services on account. 2. Collected $90,000 cash from accounts receivable. 3. Wrote off $3,300 of accounts receivable that were uncollectible. 4. Loaned $4,200 to an individual, Emma Gardner, in exchange for a note receivable. 5. Paid $95,000 cash for operating expenses 6. Estimated that uncollectible accounts expense would be 1 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?
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