Question

On May 1, Year 1, Benz's Sandwich Shop loaned $12,000 to Mark Henry for one year at 6 percent interest. Required a. What is Benz's interest income for Year 1? b. What is Benz's total amount of receivables at December 31, Year 1? c. How will the loan and interest be reported on Benz's Year 1 statement of cash flows? d. What is Benz's interest income for Year 2? e. What is the total amount of cash that Benz's will collect in Year 2 from Mark Henry? f. How will the loan and interest be reported on Benz's Year 2 statement of cash flows? g. What is the total amount of interest that Benz's earned on the loan to Mark Henry? (For all requirements, round your answers to the nearest dollar amount.) a. Interest income b. Receivables d. Interest income e. Cash f. Cash provided by investing activities Cash provided by operating activities g. Interest earned $ $ $ $ $ | $ $ | $ 480 10,480 10,000 240 12,720 12,000 720 720

Answer 1

		explanation
a. interest income	480	[12000*6%]/12*8
b. receivables	12480	12000 notes receivables+480ineterst receivable
c. cash used in investing activities	12000	it is cash used for investing purpose(Loaned)
d.interest income	240	[12000*6%]/12*4
e.cash	12720	12000+720interest
f. cash provided by investing activities	12000	principle received back
cash provided by operating activites	720	interest earned is classifies as income from operating activities
interest earned	720