Textbook Problem

Generating Cash from Receivables Guide Company requires additional cash for its business. Guide has decided to use its accounts receivable to raise the additional cash as follows:

1. 1. On June 30, 2019, Guide assigned $200,000 of accounts receivable to Cell Finance Company. Guide received an advance from Cell of 85% of the assigned accounts receivable, minus a commission on the advance of 3%. Prior to December 31, 2019, Guide collected $150,000 on the assigned accounts receivable and remitted $160,000 to Cell, $10,000 of which represented interese on the advance from Cell.
2. 2. On December 1, 2019, Guide sold $300,000 of accounts receivable to Factoring Company and received 80% of the value of the factored receivables. Factoring Company charged a 15% commission based on the amount of the factored receivables. The receivables were sold without recourse.

Required:

Prepare a schedule showing the expenses reported on the income statement for the year ended December 31, 2019, as a result of the preceding facts. Show all supporting computations.