equired: 1. Prepare the journal entries that would be recorded on July 1 for: a. alternative a. b. alternative b. 2. Assuming that 80% of all June 30 receivables are collected during July, prepare the necessary journal entries to record the collection and the remittance to the bank for: a. alternative a. b. alternative b.
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- Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2021, the company had accounts receivable of $1,000,000. Lonergan needs approximately $610,000 to capitalize on a unique investment opportunity. On July 1, 2021, a local bank offers Lonergan the following two alternatives: Borrow $610,000, sign a note payable, and assign the entire receivable balance as collateral. At the end of each month, a remittance will be made to the bank that equals the amount of receivables collected plus 12% interest on the unpaid balance of the note at the beginning of the period. Transfer $660,000 of specific receivables to the bank without recourse. The bank will charge a 3% factoring fee on the amount of receivables transferred. The bank will collect the receivables directly from customers. The sale criteria are met. Required:1. Prepare the journal entries that would be recorded on July 1 for: a. alternative a. b. alternative b. 2. Assuming that…On December 31, 2020, the cash account of Minerva Company has a debit balance of P906,000. An analysis if the cash account shows the following details: Undeposited collections 20,000 Cash in bank - PCIBchecking account 150,000 Cash in bank - PNB (overdraft) -12,000 Undeposited NSFcheck received from a customer, dated December 1, 2020 3,000 Undeposited check from a customer, dated January 15, 2021 7,000 Cash in bank - PCIB(fund for payroll) 40,000 Cash in bank - PCIB(savings deposit) 25,000 Cash in bank - PCIB(money market instrument, 90 days) 500,000 Cash in foreign bank (restricted) 25,000 IOUS from officers 8,000 Sinking fund cash 110,000 Listed stock held as temporary investment 30,000 Total 906,000 Cash and cash equivalents on Minerva's December 31, 2020 statement of financial position should beLonergan Company occasIonally uses ns accounts recelvable to obtaln immediate cash. At the end of June 2021, the companynad accounts recelvable of $840,000, Lonergan needs approximately $560.000 to capitaltze on a unique Invectmenr opporunty on July 1. 2021, a local bank offers Lonergan the following two alternatives a. Borrow $560,000, sign a note payable, and assign the entire recelvable balance as collateral At the end of each month, a remittance will be made to the bank that equals the amount of recevables collected plus 9% Interest on the unpald balance of the note at the beginning of the pertod. D. Transfer $580,000 of specific receivables to the bank without reCourse. The bank will charge a 4% factoring fee on the amount or receivables transferred. The bank will collect the recelvables directly from customers. The sale criterla are met. Required: 1. Prepare the foumal entries that would be recorded on July 1 for. a. alternative a. b. alternative b. 2 Assuming that 80% of all…
- Tagum Inc. required additional cash for its operation and used accounts receivable to raise such needed cash, as follows: On December 1, 2021 Tagum Inc. assigned on a non-notification basis accounts receivable of P 5,000,000 to a bank in consideration for a loan of 90% of the receivables less 5% service fee on the accounts assigned. Tagum Inc. signed a note for the bank loan. On December 31, 2021, Tagum Inc. collected assigned accounts of P3,000,000 less discount of P 200,000. Tagum Inc. remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. Tagum Inc. sold P 1,550,000 of accounts receivable for P 1,340,000 . The receivables had a carrying amount of P 1,470,000 and were sold outright on a nonrecourse basis. Tagum Inc. received an advance of P 300,000 from Union Bank by pledging P 360,000 of accounts receivable On June 30, 2021,…Ireland Corporation obtained a $62,000 note receivable from a customer on June 30, 2021. The note, along with interest at 5%, is due on June 30. 2022. On September 30, 2021, Ireland discounted the note at Cloverdale bank. The bank's discount rate is 8%. What amount of cash did. Ireland receive from Cloverdale Bank? Multiple Choice $58,094. $57,040. $62.775. < Prev 15 of 15 NextVKS Company’s “cash count” as of December 31, 2021, is composed of the following:· Cash on Hand- P500,000· Demand Deposit- P2,000,000· Time Deposit, 30 days- P1,000,000· NSF Check of customer- P40,000· Money market placement (due June 30, 2022)- P1,500,000· Savings Deposit in a closed bank- P100,000· IOU from employee- P20,000· Pension Fund- P3,000,000· Petty Cash Fund- P10,000· Customer’s Check dated January 1, 2022- P50,000· Customer’s Check outstanding for 18 months- P40,000· Unused credit line- P500, 000 Additional information:a. Check of P200, 000 in payment of accounts payable was recorded on December 31, 2021 but mailed to suppliers on January 5, 2022.b. Check of P100, 000 dated January 15, 2022, in payment of accounts payable was recorded and mailed on December 31, 2021.c. The company uses the calendar year. The Cash Receipt Journal was held open until January 15, 2022, during which time P400, 000 was…
- Tagum Inc. required additional cash for its operation and used accounts receivable to raise such needed cash, as follows: On December 1, 2021 Tagum Inc. assigned on a non-notification basis accounts receivable of P 5,000,000 to a bank in consideration for a loan of 90% of the receivables less 5% service fee on the accounts assigned. Tagum Inc. signed a note for the bank loan. On December 31, 2021, Tagum Inc. collected assigned accounts of P 3,000,000 less discount of P 200,000. Tagum Inc. remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. Tagum Inc. sold P 1,550,000 of accounts receivable for P 1,340,000 . The receivables had a carrying amount of P 1,470,000 and were sold outright on a nonrecourse basis. Tagum Inc. received an advance of P 300,000 from Union Bank by pledging P 360,000 of accounts receivable On June 30,…Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.During 2021, its first year of operations, Pave Construction provides services on account of $156,000. By the end of 2021, cash collections on these accounts total $108,000. Pave estimates that 20% of the uncollected accounts will be uncollectible, In 2022, the company writes off uncollectible accounts of $8,640. 2-a. Record the write-off of accounts receivable in 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
- On October 31, 2021, Bundle Company engaged in the following transactions: (1) Obtained a P500,000, six-month loan from City Bank, discounted at 12%. The company pledged P500,000 of accounts receivable as security for the loan. What is the total cash received from the financing of receivables?Selkirk Company obtained a $16,000 note receivable from a customer on January 1, 2024. The note, along with interest at 12%, is due on July 1, 2024. On February 28, 2024, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 15%. Required: Prepare the journal entries required on February 28, 2024, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale.Please show work. On July 1 of the current year, Rio Bravo factored receivables with a carrying value of $250,000 to a local bank. The transfer was made with a recourse of $3000. The bank assesses a finance charge of 3% of the amount of accounts receivable and retains an amount equal to 5% of the accounts receivable (for probable adjustments). The journal entry for this transaction will include which of the following? A. Debit to Recourse Liability of $3,000 B. Debit to Cash of $233,000. C. Debit to Due from Bank of $15,500. D. Debit to Loss on Sale of Receivables of $10,500. E. Mor than one of these.