Accounts receivable financing (LO1) Charmin Paper Company sells to the 12 accounts listed next.
Account Receivable Balance Outstanding Average Age of
the Account over the Last Year
A $ 60,800 22
B 168,000 43
C 78,300 19
D 24,300 55
E 58,900 42
F 238,000 39
G 30,400 16
H 374,000 72
I 41,400 32
J 96,500 58
K 292,000 17
L 67,700 37
Capital Financial Corporation will lend 90 percent against account balances that have averaged 30 days or less, 80 percent for account balances between 31 and 40 days, and 70 percent for account balances between 41 and 45 days. Customers that take over 45 days to pay their bills are not considered acceptable accounts for a loan. The current prime rate is 9.50 percent, and Capital charges 3.50 percent over prime to Charming as its annual loan rate.
a. Determine the maximum loan for which Charmin Paper Company could qualify.
b. Determine how much one month’s interest expense would be on the loan balance determined in part a.

Answer:

Charmin Paper Company

a. The maximum loan for which Charmin Paper Company could qualify is:

= $851,860

b. One month's interest expense on the loan balance determined in part a would be:

= $9,228.48

Explanation:

a) Data and Calculations:

Account Receivable                 Average Age of

Balance Outstanding   the Account over the Last Year

A     $ 60,800                                 22

B       168,000                                 43

C        78,300                                  19

D       24,300                                  55

E       58,900                                  42

F    238,000                                   39

G     30,400                                    16

H   374,000                                   72

I       41,400                                    32

J    96,500                                    58

K 292,000                                     17

L    67,700                                    37

Lending by Capital Financial Corporation:

Average age           Percentage

<=30 days                    90%

31-40 days                   80%

41-45 days                   70%

above 45 days              0%

<=30 days                    90%

A     $ 60,800              22

C        78,300               19

G       30,400               16

K    292,000               17

Total = $461,500 * 90% = $415,350

41-45 days                   70%

B       168,000              43

 E       58,900               42

Total = $226,900 * 70% = $158,830

31-40 days                   80%

F    238,000                39

 I        41,400                 32  

L      67,700                 37

Total = $347,100 * 80% = $277,680

Total amount that Capital can extend = $851,860

Prime rate = 9.50%

Capital charges over prime = 3.50%

Total interest charge = 13%

Annual Interest expense = $110,742 ($851,860 * 13%)

One month's interest expense = $9,228.48 ($110,742/12)

Retained earnings, December 31, 2013 $342,700
Cost of buildings purchased during 2014 44,100
Net income for the year ended December 31, 2014 56,200
Dividends declared and paid in 2014 32,800
Increase in cash balance from January 1, 2014, to December 31, 2014 22,700
Increase in long-term debt in 2014 45,300
Required:
Calculate the Retained Earnings balance as of December 31, 2014.

Yesterday, the dollar was trading in the foreign exchange market at 1.10 euros per dollar.​ Today, the dollar is trading at 1.20 euros per dollar. The dollar has​ ________ and a possible reason for the change is​ ________ in the expected future exchange rate.

A job description should be?


A. Considered a guide.

B. Followed to the letter.

C. Created in the interview.

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Premises $1,078
Savings deposits 3,292
Cash 2,660
NOW accounts 12,816
Long-term debt 1,191
Other assets 1,633
Other time deposits 2,333
Net loans $29,981
Short-term borrowing 2,080
Other liabilities 778
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Certificates of deposit
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Federal funds sold 110

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A. essentially unrelated.
B. complementary because the realization of one will promote fulfillment of the other.
C. at least partially competing because the redistribution of income might impair incentives to work and produce.
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Suppose during 2014, Cypress Semiconductor Corporation reported net cash provided by operating activities of $89,063,000, cash used in investing of $43,133,000, and cash used in financing of $7,359,000. In addition, cash spent for fixed assets during the period was $25,900,000. Average current liabilities were $257,933,000, and average total liabilities were $280,651,000. No dividends were paid.
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a. 3,400 units
b. 683 units
c. 1,700 units
d. 136 units
e. 850 units

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2021 2022
Revenues 888 980
Expenses 760 800
Pretax accounting income (income statement) 128 180
Taxable income (tax return) 116 200
Tax rate: 25%
a. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2021 for $60 million. The cost is tax deductible in 2021.
b. Expenses include $2 million insurance premiums each year for life insurance on key executives.
c. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 and 2022 were $33 million and $35 million, respectively. Subscriptions included in 2021 and 2022 financial reporting revenues were $25 million ($10 million collected in 2020 but not recognized as revenue until 2021) and $33 million, respectively. Hint. View this as two temporary differences-one reversing in 2021; one originating in 2021.
d. 2021 expenses included a $14 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold and the loss realized in 2022.
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f. At January 1, 2021, Arndt had a deferred tax asset of $4 million and no deferred tax liability.
Required:
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2. Prepare a schedule that reconciles the difference between pretax accounting income and taxable income. Using the schedule, prepare the necessary journal entry to record income taxes for 2022.
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Which 3 types of customer statements can QuickBooks Online generate?

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Sales-Related Transactions
Merchandise is sold on account to a customer for $7,400, terms FOB shipping point, 1/10, n/30. The seller
paid the freight of $390. Determine the following:
a.
Amount of the sale

b.
Amount debited to Accounts Receivable

c.
Amount received within the discount period
7,326 X

Lewis Company's standard labor cost of producing one unit of Product DD is 3.3 hours at the rate of $12.4 per hour. During August, 43,900 hours of labor are incurred at a cost of $12.60 per hour to produce 13,100 units of Product DD.
1. Compute the total labor variance.
2. Compute the labor price and quantity variances.
3. Compute the labor price and quantity variances, assuming the standard is 3.7 hours of direct labor at $12.70 per hour.

The Learning Journal is a space where you should reflect on what was learned during the week and how it applies to your daily life and will help you with your life (career) goals.

a. True
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Cosmo Company reported credit sales of $345,000 for the calendar year in its first year of operations. At December 31, customers buying on credit owed $35,000 to the company. Based on the experience of similar businesses, management estimates that $3,500 of its accounts receivable will be uncollectible.

Required:
Prepare the necessary December 31 adjusting entry by selecting the correct account names and dollar amounts

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Indirect materials $11,600
Factory supervision labor 3,700
Utilities 500
Depreciation (factory) 600
Small tools 230
Equipment rental 720

Journalize the entry to record the factory overhead incurred during April.

Wages of 8,000 are earned by workers but not paid as of december 31

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