Exercise 7-1 (Algo) Cash and cash equivalents; restricted cash (L07-2] The controller of the Red Wing Corporation is in the process of preparing the company's 2021 financial statements. She is trying to determine the correct balance of cash and cash equivalents to be reported as a current asset in the balance sheet. The following items are being considered: a. Balances in the company's accounts at the First National Bank; checking $14,300, savings $22,900. b. Undeposited customer checks of $6,000. c. Currency and coins on hand of $660. d. Savings account at the East Bay Bank with a balance of $480,000. This account is being used to accumulate cash for future plant expansion (in 2023). e. $27,000 in a checking account at the East Bay Bank. The balance in the account represents a 15% compensating balance for a $180,000 loan with the bank. Red Wing may not withdraw the funds until the loan is due in 2024. f. U.S. Treasury bills; 2-month maturity bills totaling $23,000, and 7-month bills totaling $28,000. Required: 1. Determine the correct balance of cash and cash equivalents to be reported in the current asset section of the 2021 balance sheet a Cash and cash equivalents includes: Balance in checking account Balance in savings account b. Undeposited customer checks C. Currency and coins on hand d. Balance in savings account Balance in checking account f U.S. treasury bills Total e. eck my work Exercise 7-24 (Static) Factoring of accounts receivable with recourse (LO7-8] Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,000). Mountain High anticipates a $3,000 recourse obligation. The bank charges a 2% fee (2% of $60,000), and requires that amount to be paid at the start of the factoring arrangement. Required: Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Journal entry worksheet 1 inces Record the transfer of accounts receivable. Note: Enter debits before credits Event General Journal Debit Credit 1 cat Eind gs Record entry Clear entry 2) TE nent bt in View general Journal 3 Exercise 7-19 (Algo) Noninterest-bearing note receivable (L07-7) Dints On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $40,000 on March 31, 2022. The fair value of the merchandise exchanged is $37,600. Esquire views the financing component of this contract as significant. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March 31, 2022 collection. 2. What is the effective interest rate on the note? Book Print Complete this question by entering your answers in the tabs below. References Required 1 Required 2 Prepare journal entries to record the sale of merchandise comit any entry that might be required for the cost of the goods sold), December 31, 2021 interest accrual, and the March 31, 2022 collection. (If no entry is required for a transaction/event, select " journal entry required in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet 1 2 3 4 Record the sale of merchandise. OU Note: Enter debts before credits Date General Journal Debit Credit 9021 He law 3 Exercise 7-19 (Algo) Noninterest-bearing note receivable (L07-7) On June 30, 2021, the Esquire Company sold merchandise to a customer and accepted a noninterest-bearing note in exchange. The note requires payment of $40,000 on March 31, 2022. The fair value of the merchandise exchanged is $37,600. Esquire views the financing component of this contract as significant Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), any December 31, 2021 interest accrual, and the March 31, 2022 collection 2. What is the effective interest rate on the note? Book Print Complete this question by entering your answers in the tabs below. erences Required 1 Required 2 What is the effective interest rate on the note? (Round your intermediate calculations and the final percentage answer to 3 decimal places.) Effective interest rate % Che compieve this question by entering your answers in the aus verow. Required 1 Required 2 Prepare the necessary journal entries at the end of July to adjust the general ledger cash account. (If no entry is ro transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet
