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Johnson Enterprises Inc. Is involved in the manufacture and sale of electronic components used in small AM/FM radios. The firm needs $300,000 to finance an anticipated expansion in receivables due to increased sales. Johnson's credit terms are net 60, and its average monthly credit sales are $200,000. In general, the firm's customers pay within the credit period; thus, the firm's average accounts receivable balance is $400,000. Chuck Idol, Johnson's comptroller, approached the firm's bank with a request for a loan for the $300,000 using the firm's accounts receivable as collateral. The bank offered to make a loan at a rate of 2 percent over prime plus a 1 percent processing charge on all receivables pledged.
Furthermore, the bank agreed to lend up to 75 percent of the face value of the receiv- ables pledged.Estimate the cost of the receivables loan to Johnson when the firm borrows the $300,000. The prime rate is currently 11 percent. b. Idol also requested a line of credit for $300,000 from the bank.The bank agreed to grant the necessary line of credit at a rate of 3 percent over prime and required a 15 percent com- pensating balance.Johnson currently maintains an average demand deposit of $80,000. Estimate thje cost of the line of credit to Johnson.Which source of credit should Johnson select? Why?
Installation costs totaled $12,000, which included $4,000 for taking out a section of a wall and rebuilding it because the press was too large for the doorway. The capitalized cost of the ten-ton draw press is:
access the internet to acquire a copy of the most recent annual report for the publicly traded company used to complete
List the major deficiencies in the audit and state why they took place
evaluate the following statement made by an auditor in comparison with other accounts cash and marketable securities
suppose that your companys sales staff provides information on expected sales and selling prices for items making up
Which of the following statements concerning interim financial reports is incorrect?
Cisco Systems, Inc., is the world's leading supplier of internetworking solutions targeted at corporate enterprise intranets and the internet. Using the instructions below, access Ciscos 2011 Annual Report.
Discussion board: Read the article "The Economic Effects of IFRS Adoption" and answer the following questions.
When should variances be investigated? Who should be responsible for correcting a negative variance? Why? What are some factors that can lead to variances? How can variances be corrected?
kiss the sky enterprises has bonds on the market making annual payments with 13 years to maturity and selling for 890.
Discuss the extent to which Bedell's idea will, in fact, achieve a cost savings. Consider the effects on both net income and cash flows. Who is responsible for estimating the useful lives of plant assets? Discuss any ethical issues that Gillespie s..
The balance sheet is useful for analyzing all of the following except _______________.
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