1. Green Company needed some cash --- fast. So it factored $200,000 of its accounts receivable with Chase Bank (nonrecourse basis). Chase Bank assessed a finance charge of 3% of the receivables and also required a reserve deposit in an amount equal to 5% of the receivables to cover probable adjustments from sales discounts, returns, and allowances. How much immediate cash does Green Company record as a result of factoring (selling) its receivables?

a. $0

b. $184,000

c. $194,000

d. $190,000

e. $200,000

f. None of the above.

2. Richardson Inc. had the following bank reconciliation at March 31:

Balance per bank, March 31 $46,500

Add: Deposit in transit 10,500

Less: Outstanding checks (12,600)

Balance per books, March 31 $44,400

In addition, data per bank for the month of April follows: Deposits $58,400 Disbursements 49,700

All reconciling items at March 31 cleared the bank in April. Outstanding checks at the end of April totaled $7,000. There were no deposits in transit at the end of April. What is the cash balance per books on April 30?

a. $58,500

b. $48,200

c. $52,900

d. $55,200

e. None of the above.

3. Smith Company prepared an aging schedule of its A/R at year-end and determined that the net realizable value of the receivables was $250,000. Additional information is available as follows:

Allowance for doubtful accounts, beginning of year $ 28,000 (credit balance)

Accounts written off during the year 23,000

Accounts receivable (gross) at year end 270,000

Recovery of accounts written-off 5,000

For the year, bad debt expense was:

a. $10,000

b. $23,000

c. $20,000

d. $15,000

e. None of the above.