On May 1, Year 1, Benz’s Sandwich Shop loaned $20,000 to Mark
Henry for one year at 8 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 |
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