P7.10 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. Cash $20,000 Accounts receivable 40,000 Inventory 85,000 Accounts payable 65,000 Accrued liabilities 15,000 Part 1 During 2020, Logo had the following transactions: 1. Total sales were $465,000. Of the total sales amount, $215,000 was on a credit basis. 2. On June 30, a $50,000 account receivable of a major customer was settled, with Logo accepting a $50,000, one-year, 11% note, with the interest payable at maturity. 3. Logo collected $160,000 on accounts receivable during the year. 4. At December 31, 2020, Cash had a balance of S15,000, Inventory had a balance of $80,000, Accounts Payable was $70,000, and Accrued Liabilities was $16,000. Instructions a. Prepare summary journal entries to record the items noted above. b. Finance Calculate the current ratio and the receivables turnover ratio for Logo at December 31. 2020. Use these measures to assess Logo's liquidity. The receivables turnover ratio last year was 4.75. Part 2 Now assume that at year end 2020. Logo enters into the following transactions related to the company's receivables 1. Logo sells the note receivable to Prairie Bank for $50,000 cash plus accrued interest. Given the cred itworthiness of Logo's customer, the bank accepts the note without recourse and assesses a finance charge of 3.5%. Prairie Bank will collect the note directly from the customer. 2. Logo factors some accounts receivable at the end of the year. Accounts totalling $40,000 arc trans- ferred to Primary Factors, Inc., with recourse. Primary Factors retains 6st of the balances and as sesses a finance charge of 4% on the transfer. Primary Factors will collect the reccivables from Logo's customers. The fair value of the recourse obligation is $4,000. Instructions transfer of the noteivable to Pririe Bank