Question

Issued $150,000 of common stock for cash. Provided $98,000 of services on account. Collected $86,000 cash from accounts receivable. Loaned $11,000 to Mosby Co. on November 30, Year 1. The note had a one-year term to maturity and a 10 percent interest rate. Paid $36,000 of salaries expense for the year. Paid a $2,000 dividend to the stockholders. Recorded the accrued interest on December 31, Year 1 (see item 4). Determined that $740 of accounts receivable were uncollectible.

Answer 1

(1). There is an Increase in assets.

(2). THE CASH DECREASES WHEN there is INCREAMENT in Balance sheet Assets loans.

(3).When cash increases, the Balance sheet Stockholders equity increases.

Step-by-step explanation:

(1). INCREASE IN ASSETS:

We acm determine if There will be an increase in the assets if we consider the Calculation below;

So, according to the question above;

=>" Loaned $11,000 to Mosby Co. on November 30, Year 1. " Therefore, the income will be:

(a 10 percent interest rate) × (amount loaned to Mosby co.) ÷ 12 =( 10/100) × 11,000 ÷ 12 = 91.67.

(2). THE CASH DECREASES WHEN there is INCREAMENT in Balance sheet Assets loans.

(3). When cash increases, the Balance sheet Stockholders equity increases.