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.

Required: Use the above information to determine each of the following:

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

c. Prepare the receivables section of the Balance Sheet dated September 30, 2018 using the following format.

Accounts Receivable - General		$ ???
Accounts Receivable - Assigned	$ ???
Less: Note Payable, 12%	$ ???
Equity in Accounts Receivable Assigned		$ 61,472
Less: Allowance for Doubtful Accounts		$ ???
NET REALIZABLE VALUE		$ 661,392

1) 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. $__________________

2) Using the information presented in #2 above, determine Bad Debt Expense for the period July 1 - Sept 30: $________________

3) Using the information from #2 above, determine the following:

Determine the Ending Balance of Accounts Receivable - General as of September 30th: $____________________

4) Using the information presented in #2 above, determine the following:

Determine the ending balance of Accounts Receivable - Assigned as of September 30th: $________________________

5) Using the information from #2 above, answer the following:

Determine the ending balance of the Note Payable as of September 30: $_____________________________

6) Using the information from #2 above, answer the following:

Determine the ending balance of Allowance for Doubtful Accounts (after adjustment) as of September 30: $_____________________