On 1 December 2016,Parsons Ltd sold machinery to a customer for $25,000.The customer could not pay at the time of sale but agreed to pay 11 months later and signed a 11-month bill at 8% interest.What was the total amount of cash collected by Parsons on the maturity of the bill?

Question

Quizplus · Accepted Answer

To find the total amount of cash collected by Parsons on the maturity of the bill, we need to calculate the amount of interest and add it to the original sale price.

= 25,000 x 0.08 x 11/12
 = 1,833.33

The customer will then pay the original sale price plus the interest:

= 25,000 + 1,833.33
= $26,833.33

Therefore, the correct answer is D, $26,833.3333.

On 1 December 2016,Parsons Ltd Sold Machinery to a Customer