USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6) QUESTIONS Sparky Company occasionally uses its accounts receivable to obtain immediate cash At the end of their second quarter, June 30, 2018, the company reported the following for their accounts receivable Accounts Receivable (net of $31,200 allowance) $748,800 During the period from July 1 Sept 30, Sparky had sales of $1,200,000, of which 85 were on account Sparky collected $810,000 on unassigned accounts and wrote off $12,000 of unassigned accounts receivable Sparky also collected $1,450 from a customer whose account had previously been written off (not included in the $810,000 above) (HINT Use your CH 7 notes, page 6, to help you reconcile the A R and ADA t accounts using this information ) On August 1, Sparky assigned $350,000 of the accounts receivable to E Z Finance and received 80 of the value of the accounts assigned less a finance fee of $5,000 E Z charges 1 per month (12 APR) on the outstanding loan balance Cash collections from assigned accounts are to be remitted monthly to E Z and cover principal and accrued interest for the month During August, Sparky collected $210,000 in cash of the accounts receivable assigned and, in addition, accepted sales returns of $3,000 on assigned accounts During September, Sparky collected $61,000 in cash and, in addition, wrote off $2,000 of assigned accounts as uncollectible On September 30, Sparky estimated 4 of the total accounts receivable (e g Accounts Receivable General and Accounts Receivable Assigned) to be uncollectible a Determine how much Interest Expense Sparky would report on their quarterly income statement for the period July 1 thru Sept 30 from the accounts receivable assigned b Sparky records Bad Debt Expense quarterly as an AJE Determine Bad Debt Expense for the third quarter, July 1 Sept 30

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USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6) QUESTIONS: Sparky Company occasionally uses its accounts receivable to obtain immediate cash. At the end of

USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (6) QUESTIONS:

Sparky Company occasionally uses its accounts receivable to obtain immediate cash. At the end of their second quarter, June 30, 2018, the company reported the following for their accounts receivable:

Accounts Receivable (net of $31,200 allowance) $748,800

During the period from July 1 - Sept. 30, Sparky had sales of $1,200,000, of which 85% were on account. Sparky collected $810,000 on unassigned accounts and wrote off $12,000 of unassigned accounts receivable. Sparky also collected $1,450 from a customer whose account had previously been written off (not included in the $810,000 above). (HINT: Use your CH 7 notes, page 6, to help you reconcile the A/R and ADA t-accounts using this information.)

On August 1, Sparky assigned $350,000 of the accounts receivable to E-Z Finance and received 80% of the value of the accounts assigned less a finance fee of $5,000. E-Z charges 1% per month (12% APR) on the outstanding loan balance. Cash collections from assigned accounts are to be remitted monthly to E-Z and cover principal and accrued interest for the month.
During August, Sparky collected $210,000 in cash of the accounts receivable assigned and, in addition, accepted sales returns of $3,000 on assigned accounts.
During September, Sparky collected $61,000 in cash and, in addition, wrote off $2,000 of assigned accounts as uncollectible.

On September 30, Sparky estimated 4% of the total accounts receivable (e.g. Accounts Receivable-General and Accounts Receivable-Assigned) to be uncollectible.

a. Determine how much Interest Expense Sparky would report on their quarterly income statement for the period July 1 thru Sept 30 from the accounts receivable assigned.

b. Sparky records Bad Debt Expense quarterly as an AJE. Determine Bad Debt Expense for the third quarter, July 1 - Sept 30: