Question

On November 1, Year 1, Salem Corporation sold land priced at $380,000 in exchange for a 3%, six-month note receivable. 35 Salem's balance sheet at December 31, Year 1, includes which of the following as a result of the sale of land on November 1? Multiple Choice eBook Notes Receivable of $380,000 and Interest Receivable of $5,700. Notes Receivable of $380,000 only. Notes Receivable of $380,000 and Interest Receivable of $1,900. Notes Receivable of $385,700 and Interest Receivable of $1,900.

Answer 1

Required 35:

The correct option is A. i.e Note receivable of $380,000 and interest receivable of $5,700.

Interest receivable = [($380,000 * 3%) * 6/12] = $5,700.

Required 34:

The correct option is A i.e $10,900 credit balance. ($13,100 - $2,200).

Required 33:

The correct option is A i.e $1,404

Cash bal (-) Bank charges (-) Deposit in transit (+) Outstanding checks = Balance as per bank.

$3,250 - $4 - $400 + Outstanding checks = $4,250

Outstanding check = $4,250 - $3,250 + $4 + $400

Outstanding check = $1,404.

Required 31:

The correct option is D i.e $82,880.

Cash bal in checking account	$12,760
(+) Bank credit card slip by customer	$1,400
(+) Money market fund balance	$27,000
(+) Investment in US Treasury bills	$40,000
(+) Checks received from customers	$1,720
Cash and cash equivalent	$82,880