question #2

Question 2. Steven Corporation began operations in year 1. For the year ended December 31, year 1, Steven made available the following information: Total merchandise purchases for the year Merchandise inventory at December 31, year 1 Collections from customers $350,000 70,000 200,000 All merchandise was marked to sell at 40% above cost. Assuming that all sales are on a credit basis and all receivables are collectible, what should be the balance in accounts receivable at December 31, year 1? Question 3. At the beginning of the year, Cann Co. started construction on a new $2 million addition to its plant. Total construction expenditures mde during the year were $200,000 on January 2, $600,000 on May 1, and $300,000 on December 1 . On January 2, the company borrowed $500,000 for the construction at 12%. The onl other outstanding debt the company had was a 10% interest rate, long-term mortgage of $800,000, which h outstanding the entire year. What amount of interest should Cann capitalize as part of the cost of the pa ad be