Question

I need help slving this problem of Generate cash from recievable

Generating Cash from Receivables Guide Company requires additional cash for its business. Guide has decided to use its accounts receivable to raise the additional cash as follows: 1. On June 30, 2019, Guide assigned $200,000 of accounts receivable to Cell Finance Company, Guide received an advance from Cell of 85% of the assigned accounts receivable, minus a commission on the advance of 3%. Prior to December 31, 2019, Guide collected $150,000 on the assigned accounts receivable and remitted $160,000 to Cell, $10,000 of which represented interest on the advance from Cell. 2. On December 1, 2019, Guide sold $300,000 of accounts receivable to Factoring Company and received 80% of the value of the factored receivables. Factoring Company charged a 15% commission based on the gross amount of the factored receivables. The receivables were sold without recourse. Required: Prepare a schedule showing the expenses reported on the income statement for the year ended December 31, 2019, as a result of the preceding facts GUIDE COMPANY Income Statement Effect For the Year Ended December 31, 2019 Expenses resulting from accounts receivable assigned (Schedule 1) Expenses resulting from accounts receivable sold Total expenses Schedule 1: Computation of Expenses for Accounts Receivable Assigned Assignment service charge expense (June 30, 2019) Interest expense Total expenses

Answer 1

Income Statement Effect
For the year ended December 31, 2019
Expenses resulting from accounts receivable assigned (Schedule 1)	$      15,100.00	=5100+10000
Expenses resulting from accounts receivable sold	$      45,000.00	=300000*15%
Total Expenses	$     60,100.00
Schedule 1: Computation of Accounts Receivable Assigned
Assignment service charge expenses June 30, 2019	$        5,100.00	=200000*85%*3%
Interest Expense	$      10,000.00
Total Expenses	$      15,100.00

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