The Cheyenne Pub provides catering services to local businesses The following information was available for The Cheyenne Pub for the years ended December 31, 2019 and 2020 December 31, 2019 December 31, 2020 Cash $ 1,920 $ 1,670 Accounts receivable 46,100 Allowance for doubtful accounts 530 Other current assets 8,820 7,850 Current liabilities 37,000 44,300 Total credit sales 201,000 250,000 Collections on accounts receivable 185,000 225,000 Cheyenne management is preparing for a meeting with its bank concerning renewal of a loan and has collected the following information related to the above balances 1 The cash reported at December 31, 2020, reflects the following items petty cash $1,570 and postage stamps $100 The other current assets balance at December 31, 2020, includes the checking account balance of $3,720 2 On November 30, 2020, Cheyenne agreed to accept a 6 month, $5,090 note bearing 12 interest, payable at maturity, from a major client in settlement of a $5,090 bill The above balances do not reflect this transaction 3 Cheyenne factored some accounts receivable at the end of 2020 It transferred accounts totaling $10,000 to Final Factor, Inc with recourse Final Factor will receive the collections from Cheyennes customers and will retain 2 of the balances Final Factor assesses Cheyenne a finance charge of 3 on this transfer The fair value of the recourse liability is $350 However, management has determined that the amount due from the factor and the fair value of the resource obligation have not been recorded, and neither are included in the balances above 4 Cheyenne charged off uncollectible accounts with balances of $1,440 On the basis of the latest available information, the 2020 provision for bad debts is estimated to be 2 5 of accounts receivable Prepare the current assets sectlon of The Cheyenne Pub's balance sheet at December 31,2020 (Round answers to 0 decimal places, eg 125 ) Attempts 0 of 3 used c) Compute Cheyenne's current ratlo and accounts recelvable turnover for December 31 , 2020 The accounts recelvable turnover In 2019 was 4 37 (Round answers to 2 decimal places, e g 52 75 )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 01, 2024

The Cheyenne Pub provides catering services to local businesses. The following information was available for The Cheyenne Pub for the years ended December 31, 2019

The Cheyenne Pub provides catering services to local businesses. The following information was available for The Cheyenne Pub for the years ended December 31, 2019 and 2020.

	December 31, 2019		December 31, 2020
Cash	$	1,920	$	1,670
Accounts receivable		46,100		?
Allowance for doubtful accounts		530		?
Other current assets		8,820		7,850
Current liabilities		37,000		44,300
Total credit sales		201,000		250,000
Collections on accounts receivable		185,000		225,000

Cheyenne management is preparing for a meeting with its bank concerning renewal of a loan and has collected the following information related to the above balances.

1.		The cash reported at December 31, 2020, reflects the following items: petty cash $1,570 and postage stamps $100. The other current assets balance at December 31, 2020, includes the checking account balance of $3,720.
2.		On November 30, 2020, Cheyenne agreed to accept a 6-month, $5,090 note bearing 12% interest, payable at maturity, from a major client in settlement of a $5,090 bill. The above balances do not reflect this transaction.
3.		Cheyenne factored some accounts receivable at the end of 2020. It transferred accounts totaling $10,000 to Final Factor, Inc. with recourse. Final Factor will receive the collections from Cheyennes customers and will retain 2% of the balances. Final Factor assesses Cheyenne a finance charge of 3% on this transfer. The fair value of the recourse liability is $350. However, management has determined that the amount due from the factor and the fair value of the resource obligation have not been recorded, and neither are included in the balances above.
4.		Cheyenne charged off uncollectible accounts with balances of $1,440. On the basis of the latest available information, the 2020 provision for bad debts is estimated to be 2.5% of accounts receivable.

image text in transcribed

Prepare the current assets sectlon of The Cheyenne Pub's balance sheet at December 31,2020 . (Round answers to 0 decimal places, eg. 125.) Attempts: 0 of 3 used c) Compute Cheyenne's current ratlo and accounts recelvable turnover for December 31 , 2020 . The accounts recelvable turnover In 2019 was 4.37. (Round answers to 2 decimal places, e.g. 52.75.)