On June 30, 2018, the High Five Surfboard Company had outstanding accounts receivable of $750,000. On...

On June 30, 2018, the High Five Surfboard Company had outstanding accounts receivable of $750,000. On July 1, 2018, the company borrowed $600,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The company assigned specific receivables totaling $750,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.8% of the accounts receivable assigned. Required: Prepare the journal entry to record the borrowing on the books of High Five Surfboard. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Expert Solution

ekkarill92 answered 2 years ago

On Dec 31, 2016, Rawda Company had accounts receivable of $750,000 and allowance for doubtful accounts...

On Dec 31, 2016, Rawda Company had accounts receivable of $750,000 and allowance for doubtful accounts that had a debit balance of $10,000. The company uses an aging schedule (aging method) to estimate its uncollectible accounts as shown in the following table: # of Days Outstanding Amounts Estimated % Uncollectible 0-30 $ 200,000 2% 31-60 200,000 4% 61-90 200,000 6% Over 90 150,000 8% Requirements: What is the required balance for the allowance of doubtful accounts on Dec 31, 2016?...

On June 31, Rabbit and Company had a $25,000 balance in Accounts Receivable and a $1,800...

On June 31, Rabbit and Company had a $25,000 balance in Accounts Receivable and a $1,800 credit balance in Allowance for Uncollectible Accounts. During November, the company made credit sales of $175,000. November collections on account were $135,000, and write-offs of uncollectible receivables totaled $2,600. The required allowance at period end is calculated to be $4,200. Required: Record the journal entries required by Rabbit and Company during November. Explanations are not required.

0 June 2017 30 June 2018 Cash 20,000 91,000 Accounts receivable 65,000 90,000 Inventories 58,000 62,000...

0 June 2017 30 June 2018 Cash 20,000 91,000 Accounts receivable 65,000 90,000 Inventories 58,000 62,000 Prepayments 10,000 12,000 Land 80,000 90,000 Equipment 280,000 320,000 Accumulated depreciation (60,000) (92,000) 453,000 573,000 Accounts payable 45,000 48,000 Loans 160,000 200,000 Share capital 200,000 230,000 Retained earnings 48,000 95,000 453,000 573,000 Additional information There were no disposals of land or equipment during the year. A $30,000 loan was settled through the issue of ordinary shares. There were no other repayments of loans. Profit...

The following is the ending balances of accounts at June 30, 2018 for Excell Company. Account...

The following is the ending balances of accounts at June 30, 2018 for Excell Company. Account Title Debits Credits Cash $ 121,000 Short-term investments 103,000 Accounts receivable 318,000 Prepaid expenses 70,000 Land 113,000 Buildings 358,000 Accumulated depreciation—buildings $ 179,000 Equipment 284,000 Accumulated depreciation—equipment 139,000 Accounts payable 192,000 Accrued expenses 64,000 Notes payable 138,000 Mortgage payable 320,000 Common stock 290,000 Retained earnings 45,000 Totals $ 1,367,000 $ 1,367,000 Additional information: The short-term investments account includes $37,000 in U.S. treasury bills purchased...

On 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as...

On 1 June, Mason and Boyce had Accounts Receivable and Allowance for Doubtful Debts accounts as below. Ignore GST. accounts recievables 1/6 balance 849,555 allowance for doubtful debts 1/6 balance 12.100 During June, the following transactions occurred: 1. Revenue earned on credit, $1,195,000 . 2. Sales returns, $24,100. 3. Accounts receivable collected, $1,400,000 . 4. Accounts written off as uncollectable, $15,851. Based on an ageing of accounts receivable on 30 June, the firm determined that the Allowance for Doubtful...

The December 31, 2018 balance sheet of Jenson Company had Accounts Receivable of $450,000 and a...

The December 31, 2018 balance sheet of Jenson Company had Accounts Receivable of $450,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During 2019, the following transactions occurred: Sales on account $1,600,000 Sales returns and allowances, $75,000 Collections from customers, $1,450,000 Accounts written off $35,000 Previously written off accounts of $6,000 were collected (a) Journalize the 2019 transactions. Disregard any impact on inventory. (b) If Jenson uses the percentage of sales basis to estimate bad debts expense...

Harrelson Inc. currently has $750,000 in accounts receivable

Harrelson Inc. currently has $750,000 in accounts receivable, and its days sales outstanding (DSO) is 55 days. It wants to reduce its DSO to 35 days by pressuring more of its customers to pay their bills on time. If this policy is adopted the company's average sales will fall by 15 percent. What will be the level of accounts receivable following the change? Assume a 365 day year.

At 1st July 2017 a company's allowance for receivable was $48,000. At 30 June 2018, trade...

At 1st July 2017 a company's allowance for receivable was $48,000. At 30 June 2018, trade receivable amounted to $838,000. It was decided to write off $72,000 of these debts and adjust the allowance for receivables to $60,000. What are the final amount of Receivable net of allowance for inclusion in the company's Statement of Financial position at 30 June 2018?

High Inc. has an accounts receivable turnover ratio of 7.3. Low Company has an accounts receivable...

High Inc. has an accounts receivable turnover ratio of 7.3. Low Company has an accounts receivable turnover ratio of 5. Assuming that High and Low have the same sales level, which of the following statements is correct? A. Low Company has (on average) a lower accounts receivable balance than does High. B. Low's average collection period is less than High's. C. High's average collection period is less than Low's. D. High has a higher accounts receivable balance on average than...

Gatti Corporation reported the following balances at June 30. Accounts Payable $155 Accounts Receivable 140 Accumulated...

Gatti Corporation reported the following balances at June 30. Accounts Payable $155 Accounts Receivable 140 Accumulated Depreciation—Equipment 58 Cash 24 Cash Equivalents 29 Common Stock 240 Depreciation Expense 70 Dividends 6 Equipment 440 Notes Payable (long-term) 80 Notes Payable (short-term) 50 Petty Cash 15 Restricted Cash (short-term) 20 Retained Earnings 31 Salaries and Wages Expense 470 Service Revenue 620 Unearned Revenue 54 Utilities Expense 74 Required: 1. What amount should be reported as “Cash and Cash Equivalents”? 2. Prepare a...

Question