7. The cash account shows a balance of $62,000 before reconciliation. The bank statement does not...

7. The cash account shows a balance of $62,000 before reconciliation. The bank statement does not include a deposit of $4,800 made on the last day of the month. The bank statement shows a collection by the bank of $1,500 and a customer's check for $635 was returned because it was NSF. A customer’s check for $580 was recorded on the books as $850, and a check written for $252 was recorded as $525. What is the correct balance in the cash account?

8. Soothie Inc. factors $850,000 of its accounts receivables with Ripoff Finance on a without recourse basis for a finance charge of 4%. The finance company retains an amount equal to 6.5% of the accounts receivable for possible adjustments. Prepare the journal entry required on Soothie’s books.

9. Given the above information, prepare the journal entry for Ripoff Finance’s books.

10. Given the above information, Soothie factors the same amount of accounts receivables on a with recourse basis and the finance charge is 3.5%. The fair value of the recourse liability is estimated at $25,000. Prepare the journal entry required on Soothie’s books.

Expert Solution

ekkarill92 answered 1 year ago

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