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The income statement of Carsen Corporation for 2010 included the following items:

-The cash received for interest during 2010 was
A)$66,400.
B)$73,900.
C)$75,500.
D)$77,100.

Question

Use the following information for questions
The income statement of Carsen Corporation for 2010 included the following items:
 
-The cash received for interest during 2010 was
A)$66,400. 
B)$73,900. 
C)$75,500. 
D)$77,100.

Quizplus · Accepted Answer

To calculate cash received for interest, we need to add interest earned but not received at the beginning of the year to interest earned during the year and then subtract interest earned but not received at the end of the year. Using the information given in the income statement, the calculation would be: $60,000 (beginning balance of interest receivable) + $110,000 (interest earned for the year) - $96,100 (ending balance of interest receivable) = $73,900 of cash received for interest.

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