o It! Review 10-1a ou and several classmates are studying for the next accountin

Question

o It! Review 10-1a ou and several classmates are studying for the next accounting examination. They ask you to answer the following questions: ? If cash is borrowed on a $62,400. 1 1-month, 10% note on Auguqt 1, how much interest expense would be incurred by December 31? 2· The cash register total including sales taxes is S44, 730, and the sales tax rate is 5%, what is the sales taxes payable, If $44,730 is collected in advance on November 1 for 7-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31? 3.

Explanation / Answer

Calculate amount :

1) Accured interest = 62400*10%*5/12 = 2600

2) Sales tax payable = (44730*5/105) = 2130

3) Subscription revenue on december 31 = 44730*2/7 = 12780

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