Gillespie A603_Online_Final_Assessment

Gillespie A603_Online_Final_Assessment -...

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Regis University - CPS, SoM A603 - Intermediate Accounting Applications Final Course Assessment Click on  "File,"  "Page Setup,"  "Header/Footer,"  Question 1  (a) The loan from Montoya State Bank. Show your related calculations: Debit Credit 2/1/2009 Cash 192,000 Finance Charge 8,000 Notes Payable 200,000 To record new loan of assigned receivables to Montoya State Bank on February 1, 2009 Supporting Computations: Finance Charge is $200,000 * 4% finance charge Debit Credit 2/28/2009 Cash 130,000 Accounts Receivable 130,000 To record collections on accounts receivable Supporting Computations: (c) Remittances and interest paid to bank. Show your related calculations. Debit Credit 2/28/2009 Notes Payable 130,000 Interest Expense 1,500 Cash 131,500 To record payment to Montoya State Bank 2/28/2009: Supporting Computations: Interest Expense is 200,000 * 9% interest for one month so * This is considered secured borrowing because Mercer keeps the accounts and will collect on them and make payments. (e) Contrast the effects on Mercer's balance sheet of secured borrowing versus factoring the same accounts receivable: Borrowing Factoring vs. 2. Notes Payable Increases as money is owed to bank vs. 3. Finance charge on loan vs. 3. No finance charge on loan 4. Covert assets to cash slowly vs. 4. Immediate conversion of assets to cash Provide below the journal entries, in good form, required on Mercer's books to record the events identified in parts (a) – (c). In addition, respond to the questions in parts (d) and (e) below. Journal entries prepared in good form include a transaction date and a clear, concise explanation of the entry (e.g., “To record …" , To adjust . ..”, To correct …”, To accrue …”, To depreciate (or amortize) …”, etc.) . Show your related calculations. Do NOT make any formatting changes to this MS Excel file. (b) Total collections on the assigned accounts receivable for February 2009. Show your related calculations. (d) State the fact above regarding Mercer’s assignment of accounts receivable that confirms whether the company should account for the transaction as a secured borrowing or as a sale of accounts receivable. 1. Continue to collect on A/R - no reduction in A/R on balance sheet 1. A/R is actually sold to company and they collect the A/R - Books for Mercer would decrease A/R and Increase Cash 2. Nothing reported for Notes Payable as A/R is sold to company for cash
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Regis University - CPS, SoM A603 - Intermediate Accounting Applications Final Course Assessment Click on  "File,"  "Page Setup,"  "Header/Footer,"   Question 2   Fiscal year ended Dec. 31,   2009  2010  2011   Costs incurred to date   1,500,000   2,640,000   4,600,000   Estimated costs to complete   2,500,000   1,760,000   -   Customer billings during the year   2,200,000   1,800,000   1,600,000   Customer billings to date   2,200,000   4,000,000   5,600,000 
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Gillespie A603_Online_Final_Assessment -...

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