All Related Questions of Finance Charge

Q: On October 1, 2014, Chung, Inc. assigns $

On October 1, 2014, Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables a...

Q: Wood Incorporated factored $150,000 of accounts receivable with Engram

Wood Incorporated factored $150,000 of accounts receivable with Engram Factors Inc. on a without recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains...

Q: Use the information in BE7-9 for Wood. Assume that

Use the information in BE7-9 for Wood. Assume that the receivables are sold with recourse. Prepare the journal entry for Wood to record the sale, assuming that the recourse liability has a fair valu...

Q: Arness Woodcrafters sells $250,000 of receivables to Commercial Factors

Arness Woodcrafters sells $250,000 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 5% and retains an amount equal to 4% of accounts recei...

Q: Salen Company finances some of its current operations by assigning accounts receivable

Salen Company finances some of its current operations by assigning accounts receivable to a finance company. On July 1, 2014, it assigned, under guarantee, specific accounts amounting to $150,000. T...

Q: Presented below is information related to James Garfield Corp.July

Presented below is information related to James Garfield Corp. July 1 James Garfield Corp. sold to Warren Harding Co. merchandise having a sales price of $8,000 with terms 2/10, net/60. Garfield re...

Q: On April 1, 2014, Rasheed Company assigns $400,

On April 1, 2014, Rasheed Company assigns $400,000 of its accounts receivable to the Third National Bank as collateral for a $200,000 loan due July 1, 2014. The assignment agreement calls for Rashee...

Q: The trial balance before adjustment for Phil Collins Company shows the following

The trial balance before adjustment for Phil Collins Company shows the following balances. Instructions Using the data above, give the journal entries required to record each of the following...

Q: Beyoncé Corporation factors $175,000 of accounts receivable with Kathleen

Beyoncé Corporation factors $175,000 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivab...

Q: JFK Corp. factors $300,000 of accounts receivable with

JFK Corp. factors $300,000 of accounts receivable with LBJ Finance Corporation on a without recourse basis on July 1, 2014. The receivables records are transferred to LBJ Finance, which will receive...

Q: Use the information for Jones Company as presented in E7-20

Use the information for Jones Company as presented in E7-20. Jones is planning to factor some accounts receivable at the end of the year. Accounts totaling $25,000 will be transferred to Credit Fact...

Q: On July 1, 2014, Moresan Company sold special-order

On July 1, 2014, Moresan Company sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Moresan will receive interest at the prevailin...

Q: For this problem use the Metaphor-Trans-All file in

For this problem use the Metaphor-Trans-All file in ACL Demo, which is a file of outstanding sales invoices (each row represents an invoice transaction). The suggested command or other source of infor...

Q: Information on Janut Corp. follows: /

Information on Janut Corp. follows: Instructions Prepare all necessary journal entries on Janut Corp.'s books.

Q: On April 1, 2014, Ibrahim Corporation assigns $400,

On April 1, 2014, Ibrahim Corporation assigns $400,000 of its accounts receivable to First National Bank as collateral for a $200,000 loan that is due July 1, 2014. The assignment agreement calls for...

Q: The trial balance before adjustment for Sinatra Company shows the following balances

The trial balance before adjustment for Sinatra Company shows the following balances. The following cases are independent: 1. To obtain cash, Sinatra factors without recourse $20,000 of receivables w...

Q: Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic

Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic-wear retailers. The following summary information was available for Logo for the year ended December 31, 2013: Part 1 1. Tot...

Q: The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers

The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers. The following information was available on Patchwork for the years ended December 31, 2013, and 2014: During 2014,...

Q: On October 1, 2014, Alpha Inc. assigns $2

On October 1, 2014, Alpha Inc. assigns $2 million of its accounts receivable to Alberta Provincial Bank as collateral for a $1.6-million loan evidenced by a note. The bank's charges are as follows: a...

Q: Landstalker Enterprises sold $750,000 of accounts receivable to Leander

Landstalker Enterprises sold $750,000 of accounts receivable to Leander Factors, Inc. on a without recourse basis under IFRS, as the risks and rewards have been transferred to Leander. The transaction...

Q: Chessman Corporation factors $600,000 of accounts receivable with Liquidity

Chessman Corporation factors $600,000 of accounts receivable with Liquidity Financing, Inc. on a with recourse basis. Liquidity Financing will collect the receivables. The receivable records are trans...

Q: The Brugger Corp. owned a farm, operated by Jason Weimer

The Brugger Corp. owned a farm, operated by Jason Weimer, who acted as the company’s business agent. Tri-Circle, Inc. was a farm equipment company. On behalf of Brugger, Weimer offered to buy from Tri...

Q: When is a finance charge applied to credit purchases? What is

When is a finance charge applied to credit purchases? What is the common range of interest rates on credit cards?

Q: When is a finance charge applied to credit purchases? What is

When is a finance charge applied to credit purchases? What is the common range of interest rates on credit cards?

Q: In this simulation, you are asked to address various requirements regarding

In this simulation, you are asked to address various requirements regarding the accounting for receivables. Prepare responses to all parts.

Q: On October 1, 2012, Chung, Inc. assigns $

On October 1, 2012, Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables ass...

Q: Use the information presented in BE7-11 for Arness Woodcrafters but

Use the information presented in BE7-11 for Arness Woodcrafters but assume that the recourse liability has a fair value of $4,000, instead of $8,000. Prepare the journal entry and discuss the effects...

Q: Presented below is information related to Sanford Corp. July 1

Presented below is information related to Sanford Corp. July 1 Sanford Corp. sold to Legler Co. merchandise having a sales price of $10,000 with terms 2/10, net/60. Sanford records its sales and recei...

Q: On April 1, 2012, Prince Company assigns $500,

On April 1, 2012, Prince Company assigns $500,000 of its accounts receivable to the Third National Bank as collateral for a $300,000 loan due July 1, 2012. The assignment agreement calls for Prince Co...

Q: Gringo Corporation factors $250,000 of accounts receivable with Winkler

Gringo Corporation factors $250,000 of accounts receivable with Winkler Financing, Inc. on a with recourse basis. Winkler Financing will collect the receivables. The receivables records are transferre...

Q: SEK Corp. factors $400,000 of accounts receivable with

SEK Corp. factors $400,000 of accounts receivable with Mays Finance Corporation on a without recourse basis on July 1, 2012. The receivables records are transferred to Mays Finance, which will receive...

Q: Use the information for Grant Company as presented in E7-20

Use the information for Grant Company as presented in E7-20. Grant is planning to factor some accounts receivable at the end of the year. Accounts totaling $10,000 will be transferred to Credit Factor...

Q: On July 1, 2012, Moresan Company sold special-order

On July 1, 2012, Moresan Company sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Moresan will receive interest at the prevailing...

Q: The Flatiron Pub provides catering services to local businesses. The following

The Flatiron Pub provides catering services to local businesses. The following information was available for The Flatiron for the years ended December 31, 2011 and 2012. Flatiron management is prepa...

Q: Needham Corporation has a $200,000 balloon mortgage payment due

Needham Corporation has a $200,000 balloon mortgage payment due in early August. To meet its obligation, it decided on August 1 to accelerate collection of accounts receivable by assigning $260,000 of...

Q: Presented here are two independent situations. (a) On

Presented here are two independent situations. (a) On March 3, Hinckley Appliances sells $580,000 of its receivables to Marsh Factors, Inc. Marsh Factors assesses a finance charge of 3 percent of the...

Q: J&G Bank receives a large number of credit-card applications each

J&G Bank receives a large number of credit-card applications each month, an average of 30,000 with a standard deviation of 4,000, normally distributed. Approximately 60% of them are approved, but this...

Q: Salen Company finances some of its current operations by assigning accounts receivable

Salen Company finances some of its current operations by assigning accounts receivable to a finance company. On July 1, 2017, it assigned, under guarantee, specific accounts amounting to $150,000. The...

Q: On July 1, 2017, Moresan Company sold special-order

On July 1, 2017, Moresan Company sold special-order merchandise on credit and received in return an interest-bearing note receivable from the customer. Moresan will receive interest at the prevailing...

Q: On October 1, 2017, Chung, Inc. assigns $

On October 1, 2017, Chung, Inc. assigns $1,000,000 of its accounts receivable to Seneca National Bank as collateral for a $750,000 note. The bank assesses a finance charge of 2% of the receivables ass...

Q: On April 1, 2017, Rasheed Company assigns $400,

On April 1, 2017, Rasheed Company assigns $400,000 of its accounts receivable to the Third National Bank as collateral for a $200,000 loan due July 1, 2017. The assignment agreement calls for Rasheed...

Q: JFK Corp. factors $300,000 of accounts receivable with LBJ

JFK Corp. factors $300,000 of accounts receivable with LBJ Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to LBJ Finance, which will receive t...

Q: The Flatiron Pub provides catering services to local businesses. The following

The Flatiron Pub provides catering services to local businesses. The following information was available for The Flatiron Pub for the years ended December 31, 2016 and 2017. Flatiron management is p...

Q: The trial balance before adjustment for Phil Collins Company shows the following

The trial balance before adjustment for Phil Collins Company shows the following balances. Instructions Using the data above, give the journal entries required to record each of the following cases...

Q: Beyoncé Corporation factors $175,000 of accounts receivable with Kathleen

Beyoncé Corporation factors $175,000 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables recor...

Q: Use the information for Jones Company as presented in E7-20

Use the information for Jones Company as presented in E7-20. Jones is planning to factor some accounts receivable at the end of the year. Accounts totaling $25,000 will be transferred to Credit Factor...

Q: 1. The Massachusetts Bay Transit Authority (MBTA) awarded the

1. The Massachusetts Bay Transit Authority (MBTA) awarded the Perini Corp. a large contract to rehabilitate a section of railroad tracks. The work involved undercutting the existing track, removing th...

Q: Distinguish between the APR (annual percentage rate) and the finance

Distinguish between the APR (annual percentage rate) and the finance charge on a debt.

Q: Miguel Perez of Pamona, California, obtained a two-year

Miguel Perez of Pamona, California, obtained a two-year installment loan for $1,500 to buy a television set eight months ago. The loan had a 12.6 percent APR and a finance charge of $204.72. His month...

Q: Kayla Sampson, an antiques dealer from Mankato, Minnesota, received

Kayla Sampson, an antiques dealer from Mankato, Minnesota, received her monthly billing statement for April for her MasterCard account. The statement indicated that she had a beginning balance of $600...

Q: Zachary Porter of Abilene, Texas, is contemplating borrowing $10

Zachary Porter of Abilene, Texas, is contemplating borrowing $10,000 from his bank. The bank could use add-on rates of 6.5 percent for 3 years, 7 percent for 4 years, and 8 percent for 5 years. Use Eq...

Q: Parker Young recently received his monthly MasterCard bill for the period June

Parker Young recently received his monthly MasterCard bill for the period June 1–30, 2015, and wants to verify the monthly finance charge calculation, which is assessed at a rate of 15 percent per yea...

Q: Ryan Gray, a student at State College, has a balance

Ryan Gray, a student at State College, has a balance of $380 on his retail charge card; if the store levies a finance charge of 21 percent per year, how much monthly interest will be added to his acco...

Q: Sherman Jacobs plans to borrow $5,000 and to repay

Sherman Jacobs plans to borrow $5,000 and to repay it in 36 monthly installments. This loan is being made at an annual add-on interest rate of 7.5 percent. a. Calculate the finance charge on this loa...

Q: On 1 April year 1, a deep discount bond was issued

On 1 April year 1, a deep discount bond was issued by DDB AG. It had a face value of £2.5 million and covered a five-year term. The lenders were granted a discount of 5%. The coupon rate was 10% on th...

Q: Daniyar paid his April Flash Card bill in full. His May

Daniyar paid his April Flash Card bill in full. His May bill shows an average daily balance of $270.31 and a monthly periodic rate of 1.65%. What is the finance charge on Daniyar’s May statement?

Q: After Wade paid his May credit card bill, he still had

After Wade paid his May credit card bill, he still had a balance of z dollars. He made no additional payments or purchases before he received his next bill. The monthly periodic rate on this account i...

Q: Ed Lubbock’s Flash Card statement is below. There are entries missing

Ed Lubbock’s Flash Card statement is below. There are entries missing. a. What is Ed’s average daily balance? b. What is Ed’s finance charge?...

Q: Melissa wants to check the accuracy of the finance charge on her

Melissa wants to check the accuracy of the finance charge on her promissory note. She has a $6,000, 4-year loan at an APR of 3.11%. Round to the nearest cent. a. What is her monthly payment? b. What...

Q: Solomon is taking out a $15,320, 2-

Solomon is taking out a $15,320, 2-year loan with an APR of 3.29%. What will be the finance charge for this loan to the nearest dollar?  

Q: Suzanne’s average daily balance for last month was x dollars. The

Suzanne’s average daily balance for last month was x dollars. The finance charge was y dollars. a. What was the monthly percentage rate? b. What was the APR?

Q: Jared’s average daily balance for last month was $560. The

Jared’s average daily balance for last month was $560. The finance charge was $8.12. a. What was the monthly percentage rate? b. What was the APR?

Q: Ron did not pay his credit card bill in full last month

Ron did not pay his credit card bill in full last month. He wants to pay it in full this month. On this month’s bill, there is a mistake in the average daily balance. The credit card company lists the...

Q: Kristin’s credit rating was lowered, and the credit card company raised

Kristin’s credit rating was lowered, and the credit card company raised her APR from 14% to 15.2%. If her average daily balance this month is x dollars, express algebraically the increase in this mont...

Q: Determine the amount of the payment made on the following credit card

Determine the amount of the payment made on the following credit card.

Q: The previous balance after the last billing cycle is represented by A

The previous balance after the last billing cycle is represented by A, recent purchases by B, payments by C, finance charge by D, late charge by E. Express the relationship among the variables that mu...

Q: Sarah is taking out a $24,400, 4-

Sarah is taking out a $24,400, 4-year new-car loan with an APR of 2.88%. What is the finance charge for this loan? Round to the nearest hundred dollars.

Q: Juan purchased a tool set for t dollars on the installment plan

Juan purchased a tool set for t dollars on the installment plan. He made a 15% down payment and agreed to pay m dollars per month for the next y years. Express the finance charge algebraically.

Q: Kim’s credit card was not paid in full last month so she

Kim’s credit card was not paid in full last month so she will pay a finance charge this month. She had an average daily balance of d dollars during this billing period, which had 31 days. The APR was...

Q: The finance charge on Lena’s credit card bill last month was $

The finance charge on Lena’s credit card bill last month was $13.50. Her APR is 18%. What was her average daily balance?

Q: Riel had an average daily balance of $415.22 on

Riel had an average daily balance of $415.22 on his May credit card statement. The bill showed that his APR was 21.6% and that his finance charge was $89.69. When he verified the finance charge, did h...

Q: Examine the summary section of the monthly credit card statement. Use

Examine the summary section of the monthly credit card statement. Use the first five entries to determine the new balance.

Q: Irina’s credit card has an APR of 16.8%. She

Irina’s credit card has an APR of 16.8%. She never pays her balance in full, so she always pays a finance charge. Her next billing cycle starts today. The billing period is 30 days. Today’s balance is...

Q: Use the credit card statement and a blank credit card calendar.

Use the credit card statement and a blank credit card calendar. a. What is the total of all of the purchases made this billing cycle? b. What is the amount of total payments? c. What is sum of the...

Q: Jackson purchased $5,200 worth of electronic equipment from Better

Jackson purchased $5,200 worth of electronic equipment from Better Buy on their deferred payment plan. The plan allows the customer to make no down payment and no payment at all for 5 months. If the e...

Q: Naoko has these daily balances on his credit card for September’s billing

Naoko has these daily balances on his credit card for September’s billing period. He paid his balance from the August billing in full. 2 days @ $99.78 15 days @ $315.64 11 days @ $515.64 2 days @...

Q: Use Mark Gilley’s FlashCard statement. There is an error in his

Use Mark Gilley’s FlashCard statement. There is an error in his bill. The average daily balance, finance charge, available credit, and new balance amounts are not filled in. You can...

Q: Max created a spreadsheet for installment purchase calculations. /

Max created a spreadsheet for installment purchase calculations. a. Write a spreadsheet formula to compute the down payment in cell C2. b. Write a spreadsheet formula to compute the time in months...

Q: Linda bought a washer and dryer from Mill Page Laundry Supplies for

Linda bought a washer and dryer from Mill Page Laundry Supplies for y dollars. She signed an installment agreement requiring a 15% down payment and monthly payments of x dollars for 1 year. a. Expres...

Q: Ari purchased a microwave oven on an installment plan for m dollars

Ari purchased a microwave oven on an installment plan for m dollars. He made a 20% down payment and agreed to pay x dollars per month for two years. Express the finance charge (interest) algebraically...

Q: Ralph just received his June Flash Card bill. He did not

Ralph just received his June Flash Card bill. He did not pay his May bill in full, so his June bill shows a previous balance and a finance charge. The average daily balance is $470, and the monthly pe...

Q: Lauren did not pay her January FlashCard bill in full, so

Lauren did not pay her January FlashCard bill in full, so her February bill has a finance charge added on. The average daily balance is $510.44, and the monthly periodic rate is 1.3%. What should Laur...

Q: Jennifer did not pay her FlashCard bill in full in September.

Jennifer did not pay her FlashCard bill in full in September. Her October bill showed a finance charge, and she wants to see whether or not it is correct. The average daily balance is $970.50, and the...

Q: On October 1, 2017, Alpha Inc. assigns $3

On October 1, 2017, Alpha Inc. assigns $3 million of its accounts receivable to Alberta Provincial Bank as collateral for a $2.6-million loan evidenced by a note. The bank’s charges are as follows: a...

Q: On April 1, 2017, Ibrahim Corporation assigns $400,

On April 1, 2017, Ibrahim Corporation assigns $400,000 of its accounts receivable to First National Bank as collateral for a $200,000 loan that is due July 1, 2017. The assignment agreement calls for...

Q: The trial balance before adjustment for Bassel Company shows the following balances

The trial balance before adjustment for Bassel Company shows the following balances. The following cases are independent: 1. To obtain cash, Bassel factors without recourse $20,000 of receivables wi...

Q: Chessman Corporation factors $600,000 of accounts receivable with Liquidity

Chessman Corporation factors $600,000 of accounts receivable with Liquidity Financing, Inc. on a with recourse basis. Liquidity Financing will collect the receivables. The receivable records are trans...

Q: Information on Janut Corp., which reports under ASPE, follows:

Information on Janut Corp., which reports under ASPE, follows: July 1 Janut Corp. sold to Harding Ltd. merchandise having a sales price of $9,000, terms 3/10, n/60. Janut records its sales and receiva...

Q: The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers

The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers. The following information was available on Patchwork for the years ended December 31, 2016 and 2017: During 2017,...

Q: Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic

Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic-wear retailers. The following summary information was available for Logo for the year ended December 31, 2016: Cash……………………...

Q: Scenario Frantisek Precision Engineering plc (FPE) is an engineering company

Scenario Frantisek Precision Engineering plc (FPE) is an engineering company that makes tools and equipment for a wide range of applications. FPE has 12 operating divisions, each of which is responsib...

Q: Suppose the Chans in Exercise 16 use a credit card rather than

Suppose the Chans in Exercise 16 use a credit card rather than an installment plan. Assume that they make the same down payment, have no finance charge the first month, make no additional purchases on...

Q: Christine took a world cruise that had a cash price of $

Christine took a world cruise that had a cash price of $23,000 by paying 10% down and financing the balance with a 48-month fixed installment loan. The APR on the loan was 6.0%. Before making the 12th...

Q: Financing a Computer Ilga purchased a new computer on a monthly purchase

Financing a Computer Ilga purchased a new computer on a monthly purchase plan. The computer sold for $1495. Ilga paid 5% down and $64 a month for 24 months. (a) What finance charge did Ilga pay? (b) W...

Q: Financing Furniture Mr. and Mrs. Chan want to buy furniture

Financing Furniture Mr. and Mrs. Chan want to buy furniture that has a cash price of $3450. On the installment plan, they must pay 25% of the cash price as a down payment and make six monthly payments...

Q: Previous Balance Method On September 5, the billing date,

Previous Balance Method On September 5, the billing date, Verna had a balance due of $567.20 on her credit card. The transactions during the following month were (a) Determine the finance charge on O...

Q: Previous Balance Method On April 15, the billing date, Gabrielle

Previous Balance Method On April 15, the billing date, Gabrielle had a balance due of $57.88 on her credit card. She is redecorating her apartment and has the following transactions. (a) Determine th...

Q: Average Daily Balance Method The Levys’ credit card statement shows a balance

Average Daily Balance Method The Levys’ credit card statement shows a balance due of $1578.25 on March 23, the billing date. For the period ending April 23, they had the following tr...

Q: Refer to Exercise 26. Instead of the previous balance method,

Refer to Exercise 26. Instead of the previous balance method, suppose Verna’s bank uses the average daily balance method. (a) Determine Verna’s average daily balance for the billing period from Septem...

Q: Chessman Corporation factors $600,000 of accounts receivable with Liquidity

Chessman Corporation factors $600,000 of accounts receivable with Liquidity Financing, Inc. on a with recourse basis. Liquidity Financing will collect the receivables. The receivable records are trans...

Q: On April 1, 2020, Ibrahim Corporation assigns $400,

On April 1, 2020, Ibrahim Corporation assigns $400,000 of its accounts receivable to First National Bank as collateral for a $200,000 loan that is due mJuly 1, 2020. The assignment agreement calls for...

Q: Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic

Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic-wear retailers. The following summary information was available for Logo for the year ended December 31, 2019: Part 1 Duri...

Q: The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers

The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers. The following information was available on Patchwork for the years ended December 31, 2019 and 2020: During 2020,...

Q: On October l, 2020, Alpha Inc. assigns $3

On October l, 2020, Alpha Inc. assigns $3 million of its accounts receivable to Alberta Provincial Bank as collateral for a $2.6-million loan evidenced by a note. The bank's charges are as follows: a...

Q: Use the information for Landstalker Enterprises in BE7.15 and assume

Use the information for Landstalker Enterprises in BE7.15 and assume instead that the receivables are sold with recourse. Prepare the journal entry for Landstalker to record the sale, assuming that th...

Q: Evergreen Company sells lawn and garden products to wholesalers. The company’s

Evergreen Company sells lawn and garden products to wholesalers. The company’s fiscal year-end is December 31. During 2021, the following transactions related to receivables occurred: Feb. 28: Sold me...

Q: On May 1, Onyx, Inc. factored $600,

On May 1, Onyx, Inc. factored $600,000 of accounts receivable with Cookie Finance without recourse. Cookie Finance assessed a finance charge of 6% of the total accounts receivable factored and retaine...

Q: J&G Bank receives an average of 30,000 credit

J&G Bank receives an average of 30,000 credit card applications each month. Approximately 60% of them are approved. Each customer charges an average of $2,000 to his or her credit card each month. App...