On march 1, 2013 Peppers Deli Loaned $ 18,000.00 to Simms Supply for one year at

Question

On march 1, 2013 Peppers Deli Loaned $ 18,000.00 to Simms Supply for one year at 5 % intrest.

A. What is Peppers intrest incomefor2013?

B. What is Peppers total amount of receivable at December 31, 2013?

C. What amount will be reported on Peppers 2013 Statement?

D. What is Peppers intrest income for 2014?

E What is the total amount of cash that Peppers will collect in 2014 from Simms Supply?

F. What amount will be reported on Peppers 2014 Statement?

What is the total amount of intrest Peppers Deli will earn from the lon to Simms Supply?

Explanation / Answer

A. What is Peppers intrest incomefor2013?
Int Income = 5%*18000*(10/12) =$750

B. What is Peppers total amount of receivable at December 31, 2013?
Acct Rxable = Loan + Int accrued for 10 months
= 18000+750 = 18750

C. What amount will be reported on Peppers 2013 Statement?
Acct Rxabale 18000
Int Accrued 750

D. What is Peppers intrest income for 2014?
Int Income = 5%*18000 = 900

E What is the total amount of cash that Peppers will collect in 2014 from Simms Supply?

Cash will be 18000+900 = 18900

F. What amount will be reported on Peppers 2014 Statement?
Cash increase by 18900

What is the total amount of intrest Peppers Deli will earn from the lon to Simms Supply
Total nterest = 5%*18000 = 900

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