Determine the Missing Information for the Following Line of Credit

question 32

Essay

Determine the missing information for the following line of credit.
Harold has a line of credit secured by the equity in his home.The limit on his line of credit is $85 000.Transactions for the period May 1 to September 30 are shown below.Harold owed $45 967.06 on his line of credit on May 1.
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Note: "-" indicates a negative balance.
Overdraft interest is 28.8% p.a.The line of credit interest is variable.It was 6.15% on May 1,6.50% effective June 20,and 6.55% effective September 10.
a)Calculate the interest payments on May 31,June 30,July 31,August 31,and September 30.
b)What is the account balance on September 30?

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Definitions:

Indirect Labor

Wages paid to employees who are not directly involved in production, but support the manufacturing process.

Production Department

A specific area or segment of a manufacturing company responsible for the actual production of goods.

Weighted Average Method

The weighted average method calculates the cost of inventory based on the average cost of all similar items in inventory, adjusted for the quantity of items.

Direct Labor

Labor costs associated with employees who are directly involved in the manufacturing process of a product.