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    P7-11 (Income Effects of Receivables Transactions) Sandburg Company Requires Additional Cash For Its

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    Della Putri Reba Utamy
    Sandburg Company assigned and sold some of its accounts receivable to raise cash. For receivables assigned to Keller Finance: Sandburg received an 80% advance less 3% commission, and later remitted more to include interest expense, totaling $22,320 in expense. For receivables sold outright to Wunsch, Sandburg recorded a $30,000 loss. In total, the income statement reflected $52,320 in expenses from these receivables transactions for the year ended December 31, 2010.

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    P7-11 (Income Effects of Receivables Transactions) Sandburg Company Requires Additional Cash For Its

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    Della Putri Reba Utamy
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    Sandburg Company assigned and sold some of its accounts receivable to raise cash. For receivables assigned to Keller Finance: Sandburg received an 80% advance less 3% commission, and later remitted more to include interest expense, totaling $22,320 in expense. For receivables sold outright to Wunsch, Sandburg recorded a $30,000 loss. In total, the income statement reflected $52,320 in expenses from these receivables transactions for the year ended December 31, 2010.

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    Sandburg Company assigned and sold some of its accounts receivable to raise cash. For receivables assigned to Keller Finance: Sandburg received an 80% advance less 3% commission, and later remitted more to include interest expense, totaling $22,320 in expense. For receivables sold outright to Wunsch, Sandburg recorded a $30,000 loss. In total, the income statement reflected $52,320 in expenses from these receivables transactions for the year ended December 31, 2010.

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    323 views3 pages

    P7-11 (Income Effects of Receivables Transactions) Sandburg Company Requires Additional Cash For Its

    Uploaded by

    Della Putri Reba Utamy
    Sandburg Company assigned and sold some of its accounts receivable to raise cash. For receivables assigned to Keller Finance: Sandburg received an 80% advance less 3% commission, and later remitted more to include interest expense, totaling $22,320 in expense. For receivables sold outright to Wunsch, Sandburg recorded a $30,000 loss. In total, the income statement reflected $52,320 in expenses from these receivables transactions for the year ended December 31, 2010.

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    of 3

    TUGAS TM 1

    HUMAIRI AKEDA SIRKOMBA


    11187000422

    P7-11 (Income Effects of Receivables Transactions) Sandburg Company requires additional cash for its
    business. Sandburg has decided to use its accounts receivable to raise the additional cash and has asked
    you to determine the income statement effects of the following contemplated transactions.
    1. On July 1, 2010, Sandburg assigned €400,000 of accounts receivable to Keller Finance Company. Sandburg
    received an advance from Keller of 80% of the assigned accounts receivable less a commission of 3% on the
    advance. Prior to December 31, 2010, Sandburg collected €220,000 on the assigned accounts receivable, and
    remitted €232,720 to Keller, €12,720 of which represented interest on the advance from Keller.
    2. On December 1, 2010, Sandburg sold €300,000 of net accounts receivable to Wunsch Company for €270,000. The
    receivables were sold outright on a without guarantee (recourse) basis.
    3. On December 31, 2010, an advance of €120,000 was received from First Bank by pledging €160,000 of
    Sandburg’s accounts receivable. Sandburg’s first payment to First Bank is due on January 30, 2011.
    Instructions
    Prepare a schedule showing the income statement effects for the year ended December 31, 2010, as a result of the above
    facts.

    Jawab:
    Computation of Expense for Accounts Receivable Assigned (Schedule 1)
    Assignment expense:
    Accounts receivable assigned (400,000 x 80%) 320,000
    Advance by Keller Finance Company (320,000 x 3%) 9,600
    Interest expense 12,720
    Total expense 22,320

    SANDBURG COMPANY
    Income Statement Effects
    For the Year Ended December 31, 2010
    Expenses resulting from accounts receivable
    assigned (Schedule 1) 22,320
    Loss rsulting from accounts receivbale
    Sold (300,000-270,000) 30,000
    Total expenses 52,320
    TUGAS TM 1
    HUMAIRI AKEDA SIRKOMBA
    11187000422
    TUGAS TM 1
    HUMAIRI AKEDA SIRKOMBA
    11187000422

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