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

Option (B) is correct.

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

(B) $137,800

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

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