Question

The income statement of Dolan Corporation for 2017 included the following items:

Interest Revenue $141,000
Salaries and Wages Expense 210,000
Insurance Expense 21,000

The following balance have been excerpted from Dolan Corporation's balance sheets:
Dec 31, 2017 Dec 31, 2016
Interest Receivable $18,200 $15,000
Salaries and Wages payable 17,800 8,400
Prepaid Insurance 2,200 3,000

The cash received for interest durning 2017 was?
(A) $122,800
(B) $137,800
(C) $141,000
(D) $144,200

Answer 1

(B) $137,800

Step-by-step explanation:

For the provided information, we have,

Interest Revenue for 2017 = $141,000

Interest Receivable Opening = $15,000

Interest Receivable Closing = $18,200

Therefore, Cash received for interest = Opening interest receivables + Interest revenue for the period - Closing interest receivables

= $15,000 + $141,000 - $18,200 = $137,800

Note: Interest Expense for the period will not be considered. As, Interest expense and interest revenue are both different items.

Thus, correct option is;

(B) $137,800

Answer 2

Answer: Option (B) is correct.

Step-by-step explanation:

Given that,

Interest Revenue = $141,000

Salaries and Wages Expense = 210,000

Insurance Expense = 21,000

Interest Receivable(2017) = $18,200

Interest Receivable(2016) = $15,000

Salaries and Wages payable(2017) = $17,800

Salaries and Wages payable(2016) = $8,400

Cash Received for Interest:

= Opening Accrued Interest Receivable + Interest Revenue - Closing Accrued Interest Receivable

= $15,000 + $141,000 - $18,200

= $137,800