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22 May, 16:39

If cash is borrowed on a $57,600, 11-month, 10% note on August 1, how much interest expense would be incurred by December 31? $enter a dollar amount 2. The cash register total including sales taxes is $44,520, and the sales tax rate is 5%. What is the sales taxes payable? $enter a dollar amount 3. If $44,520 is collected in advance on November 1 for 5-month magazine subscriptions, what amount of subscription revenue should be recognized on December 31? $enter a dollar amount

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  1. 22 May, 19:27
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    1. $2,400

    2. $2,120

    3. $17,808

    Explanation:

    1. The computation of the interest expense is shown below:

    = Total amount borrowed * interest rate * number of months : total months in a year

    = $57,600 * 10% * 5 months : 12 months

    = $2,400

    The five months is calculated from August 1 to December 31

    2. The computation of the sales taxes payable is shown below":

    = Sales tax * sale tax rate : 100 + sale tax rate

    = $44,520 * 5% : 105%

    = $2,120

    3. The computation of the amount of subscription revenue recognized is shown below:

    = Total advance collected * number of months : given months

    = $44,520 * 2 months : 5 months

    = $17,808

    The two months is calculated from November 1 to December 31
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