The balance sheet for The Itex Corporation on December 31, 2014, includes the following cash and receivables balances.

Cash First Security Bank. $45,000

Currency on hand 16,000

Petty cash fund. 1,000

Cash in bond sinking fund. 15,000

Notes receivable (including notes discounted with recourse, $15,500)........ 36,500

Accounts receivable.. $85,600

Less: Allowance for bad debts 4,150 81,450

Interest receivable. 525

Current liabilities reported in the December 31, 2014, balance sheet included:

Obligation on discounted notes receivable... $15,500

Transactions during 2015 included the following:

(a) Sales on account were $767,000.

(b) Cash collected on accounts totaled $576,500, including accounts of $93,000 with cash discounts of 2%.

(c) Notes received in settlement of accounts totaled $82,500.

(d) Notes receivable discounted as of December 31, 2014, were paid at maturity with the exception of one $3,000 note on which the company had to pay the bank $3,090, which included interest and protest fees. It is expected that recovery will be made on this note early in 2016.

(e) Customer notes of $58,500 were discounted with recourse during the year, proceeds from their transfer being $58,500. (All discounting transactions were recorded as loans). Of this total, $48,000 matured during the year without notice of protest.

(f) Customer accounts of $8,720 were written off during the year as worthless.

(g) Recoveries of bad debts written off in prior years were $2,020.

(h) Notes receivable collected during the year totaled $27,000 and interest collected was $2,450.

(i) On December 31, accrued interest on notes receivable was $630.

(j) Uncollectible accounts are estimated to be 5% of the December 31, 2015, Accounts Receivable balance.

(k) Cash of $35,000 was borrowed from First Security Bank with accounts receivable of $40,000 being pledged on the loan. Collections of $19,500 had been made on these receivables [included in the total given in transaction (b)], and this amount was applied on December 31, 2015, to payment of accrued interest on the loan of $600, and the balance to partial payment of the loan.

(l) The petty cash fund was reimbursed (meaning that cash was removed from the bank account and placed in the petty cash fund) based on the following analysis of expenditure vouchers:

Travel expense.. $112

Entertainment expense.. 78

Postage expense.. 93

Office supplies expense.. 173

Cash short and over (a revenue account).... 6

(m) Cash of $3,000 was added to a bond retirement fund.

(n) Currency on hand at December 31, 2015, was $12,000.

(o) Total cash payments for all expenses during the year were $680,000. Charge to General Expenses.

Instructions:

1. Prepare journal entries summarizing the preceding transactions and information.

2. Prepare a summary of current cash and receivables for balance sheet presentation.