1. The following information is available for Fess Company: Credit sales during 20X1 Allowance for credit losses at December 31, 20X0 $150,000.00 1,450.00 Accounts receivable deemed worthless and written off during 20X1 1,800.00 During 20X1, Fess estimated that its credit loss expense should be 1% of all credit sales. As a result of a review and aging of accounts receivable in early January 20X2, it has been determined that an allowance for credit losses of $1,600.00 is needed at December 31, 20X1. Required: a. What is the total amount that Fees should record as credit loss expense for the year ended December 31, 20X1? (Show your calculations) b. Record the journal entries affecting the Allowance for credit losses that Fess made during 20X1. 2. Weaver Inc. received a $60,000.00, six-month, 12% interest-bearing note from a customer. The note was discounted (sold) the same day to Third National Bank at 15%. Required: Compute the amount of cash Weaver received from the bank. (Show your calculations) 3. The following information relates to Zulu Company's accounts receivable for 20X1: Accounts receivable 1/1/20X1 Credit sales for 20X1 Accounts written off during 20X1 Collections from customers during 20X1 Allowance for credit losses at 12/31/20X1 $ 750,000.00 3,100,000.00 45,000.00 2,400,000.00 95,000.00 A factor has recently offered to purchase all of Zulu's outstanding receivables without recourse for 94% of their face value. Required: At what net amount should Zulu report its receivables assuming the company chooses to measure financial assets at fair value? (Show your calculations) 4. Kendall Corporation designs and manufactures sports cars. During the course of its business, Kendall generates substantial receivables from its customers. On July 1, 20X1, to improve its cash flow, Kendall establishes a securitization entity (SE and (1) transfers without recourse $20.5 million of its receivables to the SE and (22) surrenders control over these receivables. The SE then sells securities backed by the cash flows associated with Kendall's receivables. Because the SE is separate from Kendall, and the receivables are diversified across hundreds of customers, investors are willing to $24 million for the securities. The SE then transfers the $24 million to Kendall Corporation. Required: (1) Prepare Kendall's entry to record the securitization as a sale. (2) Show how your answer to requirement I would change if control over the receivables is not surrendered at the time of the transfer (i.e., an agreement exist whereby Kendall would be forced to absorb significant losses associated with the SE's receivables). In other words, record the transaction where Kendall would be taking out a loan for $24 million.