Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This is the work I did but it keeps counting it wrong. for part B Boyd Company has a line of credit with State Bank.

image text in transcribed

image text in transcribed

image text in transcribed

This is the work I did but it keeps counting it wrong. for part B

Boyd Company has a line of credit with State Bank. Boyd can borrow up to $200,000 at any time over the course of the 2018 calendar year. The following table shows the prime rate expressed as an annual percentage along with the amounts borrowed and repaid during 2018. Boyd 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, Boyd pays 7 percent (6 percent +1 percent) annual interest on $117,000 for the month of January Month January February March April through October November December Amount Borrowed or (Repaid) $ 117,000 58,000 (34,000) No change (79,000) (16,000) Prime Rate for the Month 6% 7 B No change 7 6 Boyd earned $48,000 of cash revenue during 2018. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model like the one shown here. Use a + to indicate increase, - for decrease, and if the element is not affected, leave the cell blank. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). b. What is the total amount of interest expense paid for 2018? a. Show the effects of these transactions on the financial statements using a horizontal statements model like the one show Use a + to indicate increase, - for decrease, and if the element is not affected, leave the cell blank. In the Cash Flow colu indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). b. What is the total amount of interest expense paid for 2018? Complete this question by entering your answers in the tabs below. Required A Required B What is the total amount of interest expense paid for 2018? (Do not round your monthly percentages. Round your intermediate and final answer to nearest whole dollar amount.) Interest expense 58000 -34000 january february march april may june july august september october november december 117000 175000 141000 141000 141000 141000 141000 141000 141000 141000 62000 46000 0.07 0.08 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.09 0.08 0.07 682.50 1166.67 1057.50 1057.50 1057.50 1057.50 1057.50 1057.50 1057.50 1057.50 413.33 268.33 10990.83 -79000 - 16000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Horngrens Accounting Volume 1

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol Meissner, JoAnn Johnston, Peter Norwood

11th Canadian Edition

0135359708, 9780135359709

More Books

Students also viewed these Accounting questions

Question

=+5. How can you show them their personal benefits?

Answered: 1 week ago

Question

=+7. How does it enhance their lifestyle?

Answered: 1 week ago