The balance sheet for the Itex Corporation on December 31, 2001, includes the following cash and receivables

Question:

The balance sheet for the Itex Corporation on December 31, 2001, includes the following cash and receivables balances.

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Current liabilities reported in the December 31 , 2001, balance sheet included:

Transactions during 2002 included the following:

(a) Sales on account were $$767,000$.

(b) Cash collected on accounts totaled $$576,500,$ including accounts of $$93,000$ with cash discounts of 2%.

(c) Notes received in settlement of accounts totaled $$82,500$.

(d) Notes receivable discounted as of December 31, 2001, were paid at maturity' with the exception of one $$3,000$ note on which the company had to pay the bank $$3,090,$ which included interest and protest fees. It is expected that recovery will be made on this note early in 2003.

(e) Customer notes of $$60,000$ were discounted with recourse during the year, proceeds from their transfer being $$58,500.$ (All discounting transactions were recorded as loans.) Of this total, $$48,000$ matured during the year without notice of protest.
(f) Customer accounts of $$8,720$ were written off during the year as worthless.
(g) Recoveries of bad debts written off in prior years were $$2,020$.
(h) Notes receivable collected during the year totaled $$27,000$ and interest collected was $$2,450$.
(i) On December 31, accrued interest on notes receivable was $$630$.
(j) Uncollectible accounts are estimated to be 5% of the December 3 1 , 2002, accounts receivable balance.

(k) Cash of $$35,000$ was borrowed from First Security' Bank with accounts receivable of $$40,000$ being pledged on the loan. Collections of $$19,500$ been made on these receivables [included in the total given in transaction (b)], and this amount was applied on December 31, 2002, to payment of accrued interest on the loan of $$600,$ and the balance to partial payment of the loan.
(l) The petty cash fund was reimbursed (meaning that cash was removed from the bank account and placed in the petty cash fund) based on the following analysis of expenditure vouchers:

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(m) Cash of $$3,000$ was added to a bond retirement fund.

(n) Currency on hand at December 31. 2002. was $$12,000$.
(o) Total cash payments for all expenses during the year were $$680,000.Charge$ to General Expenses.
Instructions:
1. Prepare journal entries summarizing the transactions and information given above.
2. Prepare a summary of current cash and receivables for balance sheet presentation.