*Problem 7-10 Sandhill Co. follows ASPE. It manufactures sweatshirts for sale to athletic-wear retailers. The following summary information was available for Sandhill for the year ended December 31, 2016 Cash Accounts receivable 39,200 $18,000 86,200 Accounts payable 63,500 Accrued liabilities 14,050 Part 1 During 2017, Sandhill had the following transactions 1. Total sales were $452,000. Of the total sales amount, $219,200 was on a credit basis. 2. On June 30, a $49,800 account receivable of a major customer was settled, with Sandhill accepting a $49,800, one-year, 10% note, with the interest payable at maturity 3 Sandhill collected $156,000 on accounts receivable during the year 4. At December 31, 2017, Cash had a balance of $14,800, Inventory had a balance of $7B,500, Accounts Payable was $69,000, and Accrued Liabilities was $15,100 Prepare summary journal entries to record the items noted above. (Round answers to 0 decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Credit 1. To record interest accrued) Calculate the current ratio and the receivables turnover ratio for Sandhill at December 31, 2017. (Round answers to 2 decimal places, e.g. 1.25.,) Current Ratio Accounts Receivable Turnover Part 2 times Now assume that at year end 2017, Sandhill enters into the following transactions related to the company's receivables: Sandhill sells the note receivable to Prairie Bank for $49,800 cash plus accrued interest. Given the creditworthiness of Sandhill's customer, the bank accepts the note without recourse and assesses a finance charge of 4.00% Prairie Bank will collect the note directly from the customer Prepare the journal entry to record the transfer of the note receivable to Prairie Bank. (Round answers to 0 decimal places, e.g. 8,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Sandhill factors some accounts receivable at the end of the year. Accounts totalling $38,500 are transferred to Teal Mountain, Inc., with ecourse. Tel Mountain etains 696 or the balances and assesses a finance charge of 5% on the transfer. Teal Mountain will collect the receivables from Logo's customers. The fair value of the recourse obligation is $4,010. Prepare the journal entry to record the sale of receivao Teal Mountain. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Calculate the current ratio and the receivables turnover ratio for Sandhill at December 31, 2017. (Round answers to 2 decimal places, e.g. 1.25.) Current Ratio Accounts Receivable Turnover times
