Accounts and Notes Receivable, and Their Ratios
use a Word document to address the following problem:
- P 7-12 on page 417.
- Apply your knowledge of cash and receivables management to address several questions regarding each of these assets.
Where appropriate, show all calculations leading to the final solutions. Review the scoring guide for this assignment to ensure you complete all grading criteria.
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Accounts and Notes Receivable, and Their Ratios
Question 1
In addition to the sales revenue, the income statement for Chamberlain will also include other revenues and expenses. In relation to notes receivables, we shall consider the 200,000 dollar note and the 60,000 dollar note whose principal and interest are payable on June 30th and October 31st 2017 respectively. Both notes receivables are payable at an interest of 6% of principal. As part of the accounting principles, interest earned is usually recorded as revenue in the income statement. The interest that Chamberlain will accrue by the end of June 2017, we need to make some entries as described below:
(412 words)