ACC 100 Lecture Notes - Lecture 9: Unemployment Benefits, Income Tax, Retained Earnings

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plumbuffalo42

7 Nov 2017

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Unearned revenue: current or long term: depends on the due date, eg. If the product is due in 3 years, the first year would be current and the other. 2 would be long term: unearned revenue is usually current liabilities. Principal: principal= amount that is borrowed, repaid on date determined by the bank. Interest: cost of borrowing money, due after you used the cash for a period of time, eg. Operating line of credit: creditor sets a maximum loan amount and the business can borrow as needed if it is within the boundaries, no specific day to repay the amount borrowed. Traditional bank loan: set amount of money with a maturity date and interest rate. Note payable: signed contract between the business and the bank with an interest rate. Interest in financial statements: note when you last paid, under interest payable. Interest but be accrued calculated all interest and recorded as a liability.

Related Questions

	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Total cash receipts	$	260,000	$	410,000	$	290,000	$	310,000
Total cash disbursements	$	316,000	$	286,000	$	276,000	$	296,000

The companyâs beginning cash balance for the upcoming fiscal year will be $36,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.

Required:

Prepare the companyâs cash budget for the upcoming fiscal year. (Repayments, and interest, should be indicated by a minus sign.)

oliveguinea-pig225

Select the term that best fits each of the following definitions and descriptions.

a.	Notes receivable
b.	Nontrade receivables
c.	Net realizable value
d.	Direct write-off method
e.	Interest-bearing note
f.	Maturity date
g.	Promissory note
h.	Factoring receivables
i.	Trade discount
j.	Present value
k.	Allowance method
l.	Sales discount
m.	Negotiable note
n.	Non-interest-bearing note
o.	Assignment of receivables
p.	Valuation date

____ 21. Receivables that are evidenced by a formal written promise to pay a certain sum of money at a specified date.

____ 22. The date the principal amount of a note is due to be paid.

____ 23. The sum of future receipts or payments discounted to the present date at an appropriate rate of interest.

____ 24. A method of recognizing the estimated losses from uncollectible accounts as expenses during the period in which the sales occur.

____ 25. A note that is legally transferable by endorsement and delivery.

____ 26. Any receivable arising from transactions that are not directly associated with the normal operating activities of a business.

____ 27. A note written in the form where the face amount includes the interest charges.

____ 28. The borrowing of money with receivables pledged as security on the loan.

____ 29. A note written in the form where the maker promises to pay the face amount plus interest at a specified rate.

____ 30. An unconditional written promise to pay a certain sum of money at a specified time.

ochrecricket36

On January 1, Year XXX1, Holmes Co. borrowed cash from Legacy Bank by issuing an $80,000 face value, three-year term note that had a 7% annual interest rate. The note is to be repaid by making annual payments of $30,484 that include both interest and principal on December 31 beginning Year XXX1. Holmes Co. invested the proceeds from the loan in land that generated lease revenue of $40,000 cash per year. Required: a) Prepare an amortization schedule for the $80,000 note for the three year period (i.e. show the amount applied towards interest and the amount applied to the principal for each of the four payments that Homes Co makes to Legacy Bank). Round off all calculations to the nearest dollar.b) Prepare an income statement for each of the three years; prepare a balance sheet as of December 31for each of the three years (Years XXX1 through XXX3). Assume that Homes started business on January 1, Year XXX1 by issuing common stock for $1,000 cash.c) Does cash outflow from operating activities change or remain constant each year? Why?

indigomallard301

ACC 100 Lecture Notes - Lecture 9: Unemployment Benefits, Income Tax, Retained Earnings

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