The Bank Statements of Waylon Taylor Textiles Ltd $20 \times 7$

question 92

Multiple Choice

The bank statements of Waylon Taylor Textiles Ltd. for $20 \times 7$ included the following items:
$\begin{array}{|l|r|}\hline \text { Insurance premiums paid } & \$ 12,400 \\\hline \text { Interest collected } & \$ 25,900 \\\hline \text { Salaries paid } & \$ 125,200 \\\hline\end{array}$
The following balances have been excerpted from the company's Statement of Financial Position:
$\begin{array}{|l|r|r|}\hline & \text { December 31, 20X7 } & \text { December 31, 20X6 } \\\hline \text { Prepaid insurance } & \$ 1,400 & \$ 1,700 \\\hline \text { Accrued interest receivable } & \$ 3,700 & \$ 2,900 \\\hline \text { Accrued salaries payable } & \$ 12,300 & \$ 10,600 \\\hline\end{array}$
-How much interest revenue should WTT report on its 20X7 statement of earnings?

• A) $19,300
• B) $25,100
• C) $32,500
• D) $26,700

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Definitions:

Short Term Forecasting

The practice of predicting the near-future outcomes of various variables such as sales or market trends over a short period, usually less than one year.

Top-Down Planning

A strategic planning process that begins at the highest level of the organization, setting objectives and goals that are then broken down into smaller, departmental or divisional plans.

Sustainable Growth Rate Analysis

An assessment of how much a company can grow its sales, earnings, and dividends without borrowing more money.

Equity Multiplier

A financial ratio that measures the proportion of a company's assets that are financed by shareholder equity, indicating the level of leverage used.