assigned account. On December 31, Llido remitted to Lopez the amount collected plus one month's interest on the note.
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Problem 17
On November 30,
- How much is Llido’s equity in the assigned accounts receivable as of December 31?
Step by step
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- IA - RECEIVABLE FINANCING 17. ABC has an accounts receivable with a gross amount of P200,000 and 1% sales discount if collected within 60 days. ABC sold this account to nC20 Finance Inc under a continuing agreement, with a factoring fee and commission of 5%. Also, nC20 withheld 15% of the net accounts receivable as protection for possible merchandise returns from ABC’s client. Assuming nC20 was informed by ABC that the client has returned P10,000 worth of merchandise, and the client has paid its account fully to the bank, determine the cash received by ABC from nC20 after the full collection of client’s accounts. Round off final answer to the nearest peso.On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount of $42,000. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 7%. $4 b. Determine the proceeds of the note, assuming the note is discounted at 7%.Somber Company borrows $892,000 from Silver Financing Associates by securing a revolving line of credit at a 9% interest rate on April 15. Interest is due and payable at the end of each month based on the outstanding balance at the beginning of the month. Somber assigns $939,000 of its accounts receivable as collateral for the lending arrangement. Assume that accounts receivable are collected at the end of the month and the proceeds are remitted to Silver at the end of the month. Month Accounts Receivable Collected April 140,000 May 490,000 June 117,000 Requirements a. Compute the balance of notes payable at the end of each month. b. Prepare the necessary journal entries for these transactions. c. If the accounts receivable had been pledged as collateral, what entry would be made at April 15? A: Notes Notes Payable Accounts Payable Beginning Interest Receivable Cash Paid Ending Month…
- Oriole Co. has the following transactions related to notes receivable during the last 2 months of the year. The company does not make entries to accrue interest except at December 31. Nov. 1 Loaned $54,600 cash to C. Bohr on a 12-month, 7% note. Dec. 11 Sold goods to K. R. Pine, Inc., receiving a $1,800, 90-day, 7% note. 16 Received a $14,400, 180-day, 6% note to settle an open account from A. Murdock. 31 Accrued interest revenue on all notes receivable. Journalize the transactions for Oriole Co. (Omit cost of goods sold entries.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. Use 360 days for calculation.) Date Account Titles and Explanation Debit Credit Choose a transaction date Nov. 1Dec. 11Dec. 16Dec. 31 Enter an account title Enter a debit amount Enter a credit…Loans Scotiabank approved a $230,000.00 line of credit for Buhler Industries at prime + 1%. It requires only the repayment of accrued interest on the 24th of each month, which is automatically deducted from the checking account of Buhler Industries. Buhler took out an advance on December 6 for $160,000.00 and made a payment of $130,000.00 on January 16. The prime rate was 5.25% initially and increased to 6.5% on January 7. Complete the repayment schedule below by filling in the payment and principal amounts. Date Balance Annual before Interest Transaction Rate Number Interest of Days Charged Accrued Interest Payment (+) or Advance (-) Principal Balance after Amount Transaction Dec 6 Dec 24 $160,000.00 $160,000.00 6.25% 18/365 $493.15 $493.15 $160,000.00 Jan 7 6.25% $160,000.00 14/365 $383.56 $383.56 $160,000.00 Jan 16 $160,000.00 7.5% 9/365 $295.89 $679.45 $30,000.00 Jan 24 $30,000.00 7.5% 8/365 $49.32 $728.77 $30,000.00 You can earn partial credit on this problem.Erindale Automotive borrowed $8,800 from the Bank of Montreal on a demand note on May 10. Interest on the loan, calculated on the daily balance, is charged to Erindale's current account (the separate interest method) on the 10th of each month. Erindale made a payment of $2,000 on July 20, a payment of $3,000 on October 1, and repaid the balance on December 1. The rate of interest on the loan on May 10 was 8% per annum. The rate was changed to 9.5% on August 1 and to 8.5% on October 1. What was the total interest cost for the loan? June 10 Calculate the interest charged on June 10. July 10 Calculate the interest charged on July 10. August 10 Calculate the interest accrued to July 20. Calculate the new principal on July 20. Calculate the interest accrued to August 1. Calculate the interest accrued to August 10. Calculate the interest charged on August 10. September 10 Calculate the interest charged on September 10.
- Instructions Chart of Accounts General Journal Instructions On December 1, Newton Enterprises sells $300,000 of accounts receivable to a factor without recourse, receives 80% of the value of the factored accounts, and is charged a 8% commission on the gross amount of the factored accounts receivable. Newton normally factors its accounts receivable. Required: Prepare Newton's journal entry.On April 1, Year 1, Halo Co. issued a $5,000 face value discount note to the Capri Bank. The note had a 12 percent discount rate and a one-year term. 8. The amount of cash Halo received on April 1, Year 1, was a. $5,000. b. $4,250. c. $4,400. d. $5,500. 9. The total carrying value of Halo’s liabilities on December 31, Year 1, would be a. $5,600. b. $5,000. c. $5,450. d. $4,850. 10. If Halo Co. earned $2,000 of revenue in Year 1, the amount of net income would be a. $2,000. b. $1,550. c. $1,400. d. $1,850.Recording Note Transactions The following information is extracted from Tara Corporation’s accounting records: May 1 Received a $6,000, 12%, 90-day note from V. Leigh, a customer. May 6 Received a $9,000, 10%, 120-day note from C. Gable, a customer. May 11 Sold the Leigh and Gable notes with recourse at the bank at 13%. In addition, borrowed $10,000 from the bank for 90 days at 12%. The bank remits the face value less the interest. The estimated recourse liability for Leigh and Gable is $84 and $110, respectively. July 31 The July bank statement indicated that the Leigh note had been paid. Aug. 10 Repaid the $10,000 borrowed on May 11. Sept. 4 Received notice that Gable had defaulted on the May 6 note. The bank charged a fee of $10. Paid the amount due on the Gable note to the bank. Informed Gable to pay Tara the entire amount due plus 11% interest on the total of the face amount of the note, the accrued interest, and the fee from the maturity date until Gable remits the amount owed.…
- Scotiabank approved a $250,000.00 line of credit for Buhler Industries at prime + 1%. It requires only the repayment of accrued interest on the 24th of each month, which is automatically deducted from the checking account of Buhler Industries. Buhler took out an advance on December 18 for $195,000.00 and made a payment of $160,000.00 on January 16. The prime rate was 6.25% initially and increased to 7.25% on January 5. Complete the repayment schedule below by filling in the payment and principal amounts. Date Balance Annual before Interest Transaction Rate Number of Days Interest Accrued Charged Interest Payment (+) or Advance Principal Amount Balance after Transaction (-) Dec 18 $195,000.00 Dec 24 $195,000.00 7.25% 6/365 $232.40 $232.40 $195,000.00 Jan 5 $195,000.00 7.25% 12/365 $464.79 $464.79 $195,000.00 Jan 16 $195,000.00 8.25% 11/365 $484.83 $949.62 $35,000.00 Jan 24 $35,000.00 8.25% 8/365 $63.29 $1,012.91 $35,000.0010- SK Inc, factors $400,000 of accounts receivable with Mars Finance Company on a without recourse basis on July 1,2020. The receivables records are transferred to Mars Finance, which will receive the collections. Mars Finance assesses a finance charge of 1 ½% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.Instructions:a) Prepare the journal entry on July1,2020, for SK Inc. to record the sale of receivables without recourse.b) Prepare the journal entry on July1,2020, for Mars Finance Company. to record the purchase of receivables without recou
