Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
15th Edition
ISBN: 9780134476315
Author: Chad J. Zutter, Scott B. Smart
Publisher: PEARSON
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Textbook Question
Chapter 16.3, Problem 16.14RQ
For the following methods of using inventory as short-term loan collateral, describe the basic features of each, and compare their use: (a) floating lien, (b) trust receipt loan, and (c) warehouse receipt loan.
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Students have asked these similar questions
Discuss how accounts receivable and inventory can be used as collateral for short term securedloan.
Loans and receivable should be measured subsequent to initial recognition at *
a. Amortized cost using the straight line method
b. Fair value
c. Fair value plus transaction cost
d. Amortized cost using the effective interest method
Matching
Select the term that best fits each of the following definitions and descriptions.
a.
Notes receivable
b.
Nontrade receivables
c.
Net realizable value
d.
Direct write-off method
e.
Interest-bearing note
f.
Maturity date
g.
Promissory note
h.
Factoring receivables
i.
Trade discount
j.
Present value
k.
Allowance method
l.
Sales discount
m.
Negotiable note
n.
Non-interest-bearing note
o.
Assignment of receivables
p.
Valuation date
11.
A method of recognizing the actual losses from uncollectible accounts as expenses during the period in which the receivables are determined to be uncollectible.
12.
The amount of cash expected to be received from the conversion of assets in the normal course of business.
13.
The sale of receivables without recourse for cash to a third party, usually a bank or other financial institution.
14.
Receivables that are evidenced by…
Chapter 16 Solutions
Gitman: Principl Manageri Finance_15 (15th Edition) (What's New in Finance)
Ch. 16.1 - What are the two major sources of spontaneous...Ch. 16.1 - Prob. 16.2RQCh. 16.1 - Prob. 16.3RQCh. 16.2 - How is the prime rate of interest relevant to the...Ch. 16.2 - How does the effective annual rate differ between...Ch. 16.2 - What are the basic terms and characteristics of a...Ch. 16.2 - What is a line of credit? Describe each of the...Ch. 16.2 - What is a revolving credit agreement? How does...Ch. 16.2 - Prob. 16.9RQCh. 16.3 - Prob. 16.10RQ
Ch. 16.3 - Are secured short-term loans viewed as more risky...Ch. 16.3 - In general, what interest rates and fees are...Ch. 16.3 - Describe and compare the basic features of the...Ch. 16.3 - For the following methods of using inventory as...Ch. 16 - Prob. 1ORCh. 16 - Prob. 16.1STPCh. 16 - Prob. 16.1WUECh. 16 - Prob. 16.2WUECh. 16 - Prob. 16.3WUECh. 16 - Prob. 16.4WUECh. 16 - Horizon Telecom sold 300,000 worth of 120-day...Ch. 16 - Prob. 16.1PCh. 16 - Learning Goal 1 P16-2 Cost of giving up early...Ch. 16 - Prob. 16.3PCh. 16 - Learning Goal 1 P16-4 Early payment discount...Ch. 16 - Prob. 16.6PCh. 16 - Prob. 16.7PCh. 16 - Prob. 16.8PCh. 16 - Learning Goal 3 P16-9 Cost of bank loan Data...Ch. 16 - Unsecured sources of short-term loans John Savage...Ch. 16 - Learning Goal 3 P16-11 Effective annual rate A...Ch. 16 - Prob. 16.12PCh. 16 - Compensating balance versus discount loan Weathers...Ch. 16 - Prob. 16.14PCh. 16 - Cost of commercial paper Commercial paper is...Ch. 16 - Prob. 16.16PCh. 16 - Prob. 16.17PCh. 16 - Prob. 16.18PCh. 16 - Prob. 16.19PCh. 16 - Inventory financing Raymond Manufacturing faces a...Ch. 16 - ETHICS PROBLEM Rancco Inc. reported total sales of...
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- Explain the following terms: credit transfer, dishonoured cheque, standing orderand give examples, the purposes, advantages and disadvantagesarrow_forwardHow can we determine a Loan's Balance, Principal, and Interest?arrow_forwardIn the context of handling debt - like items in M&A, what is the most buyer-friendly approach for items representing a hard claim that must be paid post-close? a. Purchase price adjustments b. Escrow accounts c. Insurance policies d. Working capital adjustments e. Debt refinancingarrow_forward
- Which of the following is a secured loan? A - All of these are secured loans B - accounts receivable financing C- line of credit D- compensating balancearrow_forwardDescribe the concept of non interest bearing on loan.arrow_forward. Accounts receivable financing is the term used to describe which of the following types of loans that involve either the assignment or the factoring of a firm's accounts receivable? A. Secured short-term loan B. Unsecured short-term loan C. Secured long-term loan D. Unsecured long-term loan E. Trust receipt loanarrow_forward
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