10) Furniture Co. owed $880.00 for merchandise plus $20.00 for insurance. The bill was due on May 6 and the owner found he was unable to pay it. To keep a good credit rating, he decided to borrow the necessary amount from a bank that charged 9% discount. The maturity date for the loan was July 5. a) How much must he repay the bank? b) What was the cost of borrowing?

10) Furniture Co. owed $880.00 for merchandise plus $20.00 for insurance. The bill was due on May 6 and the owner found he was unable to pay it. To keep a good credit rating, he decided to borrow the necessary amount from a bank that charged 9% discount. The maturity date for the loan was July 5. a) How much must he repay the bank? b) What was the cost of borrowing?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 26Q: A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer...

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A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer was able to negotiate with the company and transferred the accounts receivable into a note that includes interest, along with an up-front cash payment of $6,000. The note maturity date is 24 months with a 15% annual interest rate. What is the entry to recognize this transfer?
Orion Rentals is unable to collect on a note worth $25,000 and has accumulated interest of $250. It convert this note and interest to accounts receivable. After some time, Orion is still unable to collect the debt and it decides to sell the converted note to a collection agency. The collection agency will pay only 20% of the value of accounts receivable to Orion. What is the amount of cash paid to Orion from the collection agency? A. $5,000 B. $5,050 C. $20,000 D. $19,950
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Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit sales will be uncollectible. Allowance for Doubtful Accounts has a credit balance of 275. Prepare the adjusting entry at year-end for the estimated bad debt expense. (a) Based on an aging of its accounts receivable, Kyles Cyclery estimates that 3,200 of its year-end accounts receivable will be uncollectible. Allowance for Doubtful Accounts has a debit balance of 280 at year-end. Prepare the adjusting entry at year-end for the estimated uncollectible accounts.
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Ali Coffee Bean assumes that due to Corona, at the end of September 2020 there will be bad debts of $5,000,000 from accounts receivable belonging to Budi's Coffee Shop amounting to $20,000,000. It turned out that on October 21, 2020, Budi's Coffee Shop stated that they were unable to pay their receivables amounting to $1,000,000, so the CEO of Ali Coffee Bean allowed to write-off the receivables. As Ali Coffee Bean's financial staff, make:a. Journal Entry for write-off of Budi's Coffee Shop.b. What was the cash realizable value of Ali Coffee Shop's receivables prior to the write-off of Budi's Coffee Shop receivables in September?c. What is the cash realized value of Ali Coffee Shop's receivables after the write-off of Budi's Coffee Shop receivables?
John has opening balances on his trade receivables of £68,000 and an allowance forreceivables of £3,400. During the year John made cash sales of £146,000 and credit sales of£354,000. He collected cash from his credit customers of £340,000.At the end of the year John identified £2,000 of bad debts to write off. In addition, he estimatedthe need to increase the allowance for receivables to £4,000.A. Calculate the net trade receivables balance to present in the Statement of financial positionat the year end B. What is the total bad and doubtful expense to be charged to the Statement of Profit or lossfor the year?