Server Planet operates a web hosting company. Examine the following items and prepare the

timer Asked: Nov 17th, 2015

Question description

The beginning of year accounts payable was $100,000.  Purchases on trade accounts during the year were $650,000, and payments on account were $610,000.
The company incurs substantial costs for electricity to run its servers and air conditioning systems.  As of December 31, 20X7, it is estimated that $55,000 of electricity has been used, although the monthly billing for December has not yet been received.
Server Planet sells web hosting plans for as low as $25 per month.  However, it requires its customers to prepay in 6-month increments.  As of the end of the year, $375,000 had been coll
Web hosting services are subject to sales taxes, and Server Planet collected $65,000 during the year.  All of these amounts have been remitted to taxing authorities, with the exception of $5,000 that is due to be paid in January, 20X8.
ected for 20X8 web hosting plans.
The company has total bank loans of $1,500,000.  This debt bears interest at 6%, payable monthly.  As of December 31, 20X7, all interest
The company's bank loans ($1,500,000) are all due on June 30, 20X8.  However, Server Planet has a firm lending agreement with the bank to renew and extend $1,000,000 of this amount on a 5-year basis.  The company intends to exercise this renewal option, but is not yet sure about the final disposition of the remainder.
had been paid, with the exception of accrued interest for the last half of December.

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