Dallas Corp. reported the following information for 2015 and 2016. Interest receivable, December 31, 2015 $1,100
Interest receivable, December 31, 2016 1,400
Interest income--2016 3,200
How much cash was received for interest during 2016?
A) $2,900
B) $3,200
C) $3,500
D) $3,800

Question

Quizplus · Accepted Answer

The cash received for interest is calculated by adjusting the interest income for the change in interest receivable: $3,200 (interest income) - ($1,400 - $1,100) (increase in interest receivable) = $2,900.