A company reported the following information: $\begin{array}{ll}
\text { Interest receivable, December 31,2014 } &\$ 8,000 \
\text { Interest receivable, December 31, 2013 } &11,500 \
\text { Interest revenue for 2014 } &16,000
\end{array}$
How much cash was received for interest during 2014?
A)$12,500
B)$19,500
C)$ 8,000
D)$ 3,500

Question

A company reported the following information: $\begin{array}{ll}
 \text { Interest receivable, December 31,2014 } &\$ 8,000 \
 \text { Interest receivable, December 31, 2013 } &11,500 \
 \text { Interest revenue for 2014 } &16,000
\end{array}$ 
How much cash was received for interest during 2014?
A)$12,500
B)$19,500
C)$ 8,000
D)$ 3,500

Quizplus · Accepted Answer

The interest revenue for 2014 was $16,000, but some of that amount could be from interest accrued but not received in 2014 (i.e. the interest receivable from December 31, 2014). Therefore, the amount of cash received for interest during 2014 would be the interest revenue for 2014 ($16,000) minus the interest accrued but not received in 2014 ($8,000) plus the interest accrued but not received in 2013 ($11,500):

Cash received for interest during 2014 = $16,000 - $8,000 + $11,500 = $19,500

Therefore, the best choice is B.

A Company Reported the Following Information How Much Cash Was Received for Interest During 2014? A)$12,500

A Company Reported the Following Information How Much Cash Was Received for Interest During 2014?
A)$12,500