Sky Company collected $12,350 in interest during 2011. Sky showed $1,850 in interest receivable on its December 31, 2011, balance sheet and $5,300 on December 31, 2010. The interest revenue on the income statement for 2011 was
A) $3,450.
B) $8,900.
C) $12,350.
D) $14,200.

Question

Quizplus · Accepted Answer

To find the interest revenue for 2011, we need to add the interest collected to the change in interest receivable from the beginning of the year to the end of the year.

Interest revenue = Interest collected + (Interest receivable on 12/31/11 - Interest receivable on 12/31/10)
Interest revenue = $12,350 + ($1,850 - $5,300)
Interest revenue = $8,900

Sky Company Collected $12,350 in Interest During 2011