amount should be classified as cash on Smith ' s balance sheet at December 31 , year 1 ?
Question 11
At the end of the current year ( calendar-fiscal year ), a creditor firm ' s 6 % note receivable balance is $ 10,000 . Two years remain in the note term . Interest is due each December 31 . The debtor ' s financial position has deteriorated causing the creditor to reevaluate the note . After careful consideration , the creditor believes that only 60 % of the principal ($ 10,000 ) will be collected at the end of the term . The only interest expected to be received is 2 % of the original principal for one year , also to be collected at the end of the term . At the end of the current year , what amount of expense or loss is recognized by the creditor for this loan impairment ? The present value of $ 1 two years hence at 6 % is . 89 , and at 2 % is . 961 .
Question 12
Hutch , Inc . uses the conventional retail inventory method to account for inventory . The following information relates to 2004 operations : What amount should be reported as cost of sales for 2004 ?
Question 13
Trans Co . uses a periodic inventory system . The following are inventory transactions for the month of January : Trans uses the average pricing method to determine the value of its inventory . What amount should Trans report as cost of goods sold on its income statement for the month of January ?