The following account balances come from the records of Ourso Company: Accounts receivable. Beginning Balance $2,654 Ending Balance $3,724 Allowance for doubtful accounts 127 192 During the accounting period, Ourso recorded $11,050 of sales revenue on account. The company also wrote off a $172 account receivable. Required a. Determine the amount of cash collected from receivables. b. Determine the amount of uncollectible accounts expense recognized during the period. a Collections of accounts receivable b. Uncollectible accounts expense Rainey Enterprises loaned $25,000 to Small Co. on June 1, Year 1, for one year at 8 percent interest Required Show the effects of the following transactions in a horizontal statements model (Enter any decreases to account balances and cash outflows with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA). Investing activity (IA), or financing activity (FA). Not all cells require input. Do not round intermediate calculations, Round your final answers to the nearest whole dollar) (1) The loan to Small Co (2) The adjustment at December 31, Year 1 (3) The adjustment and collection of the note on June 1, Year 2 RAINEY ENTERPRISES Horizontal Statements Model Balance Sheet Income Statement Assets Liabilities Date Stockholders Equity Retained Earnings Cash Notes Receivable Expense 1 6/1/Year 1 2 12/31/Year 1 3 6/1/Year 2 Adjustment 6/1/Year 2 Note Collection Interest Receivable + * Revenue Net Income Statement of Cash Flows On May 1, Year 1, Benz's Sandwich Shop loaned $14,000 to Mark Henry for one year at 9 percent interest. Required. a. What is Benz's interest income for Year 1? b. What is Benz's total amount of receivables at December 31, Year 1? c. How will the loan and interest be reported on Benz's Year 1 statement of cash flows? d. What is Benz's interest income for Year 2? e. What is the total amount of cash that Benz's will collect in Year 2 from Mark Henry? f. How will the loan and interest be reported on Benz's Year 2 statement of cash flows? g. What is the total amount of interest that Benz's earned on the loan to Mark Henry? (For all requirements, round your answers to the nearest dollar amount.) a Interest income b. Receivables C d. Interest income e Cash f. g. Interest earned Banko Inc. manufactures sporting goods. The following information applies to a machine purchased on January 1, Year 1: $ 82,500 Purchase price Delivery cost $ 3,000 $ 1,000 Installation charge Estimated life 5 years Estimated units 157,000 $ 8,000 Salvage estimate. During Year 1, the machine produced 53,000 units, and during Year 2 it produced 55,000 units. Required a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. (Round your answers to the nearest dollar amount.) MACRS table: 5-Year 7-Year Year property, property,% 1 20.00 14.29 2 32.00 24.49 3 19.20 17.49 4 11.52 12.49 5 11.52 8.93 6 5.76 8.92 8.93 4.46 Year 2 Depreciation expense Depreciation expense Depreciation expense Depreciation expense a b. C d Year 1
