Reference no: EM132490752

Madison Company had sales of $157,500. Additional information from the balance sheet is below:

                                                       Beginning                     Ending

                                                                        Balance                   Balance

Accounts Receivable                                $ 22, 700               $29, 400

Accounts Payable                                       21, 700              26, 400

Question 1: How much cash was collected from customers?

Multiple Choice

Option 1: $152,800.

Option 2: $157,500.

Option 3: $150,800.

Option 4: $164,200.

Question 2: On October 1, 2019, Donna Equipment signed a one-year, 7% interest-bearing note payable for $52,000. Assuming that Donna Equipment maintains its books on a calendar year basis, how much interest expense should be reported in the 2020 income statement?

Multiple Choice

Option 1: $3,640.

Option 2: $910.

Option 3: $2,730.

Option 4: $1,820.