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[The following information applies to the questions displayed below.]
Mott Company has a line of credit with Bay Bank. Mott can borrow up to $550,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the year. Mott agreed to pay interest at an annual rate equal to 1 percent above the banks prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Mott pays 7 percent (6 percent + 1 percent) annual interest on $84,000 for the month of January.
| Month | Amount Borrowed or (Repaid) | | Prime Rate for the Month, % |
| January | | $ | 84,000 | | | | | 6 | |
| February | | | 60,000 | | | | | 6 | |
| March | | | (45,000 | ) | | | | 7 | |
| April through October | No change | | No change |
| November | | | (36,000 | ) | | | | 7 | |
| December | | | (21,000 | ) | | | | 6 | |
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Mott earned $40,000 of cash revenue during the year.
- Prepare an income statement, balance sheet, and statement of cash flows for the year.
Required information [The following information applies to the questions displayed below.) Mott Company has a line of credit with Bay Bank. Mott can borrow up to $550,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the year, Mott agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Mott pays 7 percent (6 percent + 1 percent) annual interest on $84,000 for the month of January Amount Borrowed or Prime Rate for Month (Repaid) the Month, January $ 84,000 February 60,000 March (45,000) April through October No change No change (36,000) (21,000) 6 6 7 November December Mott earned $40,000 of cash revenue during the year. b. Prepare an income statement, balance sheet, and statement of cash flows for the year. Complete this question by entering your answers in the tabs below. Income Statement Balance Sheet Stmt of Cash Flows Prepare the income statement for the year. (Round Intermediate calculations and final answers to nearest whole dollar amount.) MOTT COMPANY Income Statement Service revenue Expenses Interest expense Net income Required Information The following information applies to the questions displayed below.) Mott Company has a line of credit with Bay Bank. Mott can borrow up to $550.000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the year. Mott agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Mott pays 7 percent (6 percent +1 percent) annual interest on $84,000 for the month of January Amount Borrowed or Prime Rate for Nonth (Repaid) the Month, January $ 84,000 February 60,000 March (45.000) 7 April through October No change No change November (36,000) December (21,000) 7 Mott earned $40.000 of cash revenue during the year. b. Prepare an income statement, balance sheet, and statement of cash flows for the year Complete this question by entering your answers in the tabs below. Income Statement Balance Sheet Stmt of Cash Flows Prepare the balance sheet for the year. (Round intermediate calculations and final answers to nearest whole doliar amount.) MOTT COMPANY Balance Sheet Assets $ Total assets Liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total abilities and stockholders' equity $ 0 Income Statement Stmt of Cash Flows > Required Information [The following information applies to the questions displayed below] Mott Company has a line of credit with Bay Bank. Mott can borrow up to $550,000 at any time over the course of the calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during the year. Mott agreed to pay interest at an annual rate equal to 1 percent above the bank's prime rate. Funds are borrowed or repaid on the first day of each month. Interest is payable in cash on the last day of the month. The interest rate is applied to the outstanding monthly balance. For example, Mott pays 7 percent (6 percent - 1 percent) annual interest on $84,000 for the month of January Prime Rate for the Month, Month January February March April through October November December Amount Dorrowed or (Repaid) $ 84,000 60,000 (45,000) No change (36,000) (21,000) No change 6 Mott earned $40,000 of cash revenue during the year. b. Prepare an income statement, balance sheet, and statement of cash flows for the year. Complete this question by entering your answers in the tabs below. Statement Balance Sheet Income Stmt of Cash Flows Prepare the statement of cash flows for the year. (Cash outfiows should be indicated with a minus sign. Round intermediate calculations and final answers to nearest whole dollar amount.) MOTT COMPANY Statement of Cash Flows Cash flows from operating activities $ 0 Net cash flow from operating activities Cash flows from investing activities: Cash flows from financing activities Net cash flow from financing activities Net change in cash 0 Ending cash balance $ 0
