Question

On September 1st , 2017, 5th seven Bank loaned $15,000 to BobCat Inc. for one year...

On September 1st , 2017, 5th seven Bank loaned $15,000 to BobCat Inc. for one year at 6 percent interest. Under the terms of the promissory note, BobCat will repay the principal and pay one year's interest on September 30th , 2018.

Related to this note payable, what amount of operating cash payment would BobCat report on its 2017 statement of cash flow?

Related to this note payable, what amount of operating cash payment would BobCat report on its 2018 statement of cash flow?

Related to this note payable, what amount of interest expense would BobCat report on its 2017 income statement?

Related to this note payable, what amount of interest expense would BobCat report on its 2018 income statement?

$0 $900 $300 $600

2. The normal production range for BobCat Inc. is from 100 to 200 units. During the previous month, the production level was 140;during the current month, the production level is 110.

The total fixed cost has ...

The average fixed cost per unit has.......

The total variable cost has ......

The average variable cost per unit has....

Decreased (D) Increased (I) Stayed the same (SS) Cannot be determined (CND)

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Homework Answers

Answer #1

1)

a) answer :$0, no payment of interest

b) answer : $900 all interest paid in 2018

c) answer : $300 interest expense for 2017 is booked as payable for four months

d) answer : $600   interest expense for 2018 is booked as payable for eight months

2)

a) answer : SS being fixed cost

b) answer : I being production reduced as total fixed cost is constant

c) answer : D being production reduced and variable cost per unit is constant

d) answer : SS being variable cost per unit constant

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