Receivable

Ace Co. prepared an aging of its accounts receivable at December 31, 2019 and determined that the net realizable value of the receivables was £300,000. Additional information is available as follows:

Allowance for uncollectible accounts at 1/1/19—credit balance = £34,000

Accounts written off as uncollectible during 2019 = 23,000

Accounts receivable at 12/31/19 = 325,000

Uncollectible accounts recovered during 2019 = 5,000

For the year ended December 31, 2019, Ace’s bad debt expense would be

• 25.000

• 23.000

• 16.000

• 9.000

Nenn Co.’s allowance for uncollectible accounts was €95,000 at the end of 2019 and €90,000 at the end of 2018. For the year ended December 31, 2019, Nenn reported bad debt expense of €13,000 in its income statement. What amount did Nenn debit to the appropriate account in 2019 to write off actual bad debts?

• 5.000

• 8.000

• 13.000

• 18.000

On January 1, 2018, West Co. exchanged equipment for a £400,000 zero-interest-bearing note due on January 1, 2021. The prevailing rate of interest for a note of this type at January 1, 2018 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in West’s 2019 income statement?

• 0

• 30.000

• 33.000

• 40.000

On June 1, 2018, Yang Corp. loaned Gant €300,000 on a 12% note, payable in five annual installments of €60,000 beginning January 2, 2019. In connection with this loan, Gant was required to deposit €3,000 in a zero-interest-bearing escrow account. The amount held in escrow is to be returned to Gant after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, 2018. Gant made timely payments through November 1, 2018. On January 2, 2019, Yang received payment of the first principal installment plus all interest due. At

December 31, 2018, Yang’s interest receivable on the loan to Gant should be

• 0

• 3.000

• 6.000

• 9.000

On February 1, 2019, Henson Company factored receivables with a carrying amount of €300,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February. Assume that Henson factors the receivables on a without guarantee (recourse) basis. The loss to be reported is

• 0

• 9.000

• 15.000

• 24.000

On February 1, 2019, Henson Company factored receivables with a carrying amount of €300,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February. Assume that Henson factors the receivables on a with guarantee (recourse) basis. The amount of cash received is

• 285.000

• 276.000

• 291.000

• 300.000

Maxwell Corporation factored, with guarantee (recourse), £100,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. What amount of cash would Maxwell receive on the sale of receivables?

• 97.000

• 95.000

• 92.000

• 100.000

Wilkinson Corporation factored, with guarantee (recourse), €400,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. What amount of cash would Wilkinson receive on the sale of receivables?

• 388.000

• 380.000

• 368.000

• 400.000

Moon Inc assigns €1,500,000 of its accounts receivables as collateral for a €1 million loan with a bank. The bank assesses a 3% finance fee and charges interest on the note at 6%. What would be the journal entry to record this transaction?

• Debit Cash

  for €970,000, debit Interest Expense for €30,000, and credit Notes Payable for €1,000,000.

• Debit Cash for €970,000, debit Interest Expense for €30,000, and credit Accounts Receivable for €1,000,000.

• Debit Cash for €970,000, debit Interest Expense for €30,000, debit Due from Bank for €500,000, and credit Accounts Receivable for €1,500,000.

• Debit Cash for €910,000, debit Interest Expense for €90,000, and credit Notes Payable for €1,000,000.

Sun Inc. factors €2,000,000 of its accounts receivables without guarantee (recourse) for a finance charge of 5%. The finance company retains an amount equal to 10% of the accounts receivable for possible adjustments. What would be recorded by Sun as a gain (loss) on the transfer of receivables?

• loss 100.000

• gain 100.000

• loss 300.000

• loss 200.000