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The financial year end for Riverwood Ltd is 30 June.
a. Prepaid insurance as at 1 July 2015 was $4,000. This represents the cost of one year's insurance policy that expires on 30 June 2016.
b. Commissions to sales personnel for the five day working week ending 2 July 2016, totaling $9,600, will be paid on 2 July.
c. Sales revenue for the year included $570 of customer deposits for products that have not yet been shipped to them.
d. A total of $900 worth of stationery was charged to the office supplies expense during the year. On 30 June about $490 worth of stationery is still considered useful for next year.
e. The company has a bank loan and pays interest annually (in arrears) on 31 December.
Question 1: The estimated total interest cost for the calendar year ended 31 December 2016 is $500.
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