Gerard Appliances, Inc., is a small manufacturer of washing machines and dryers. It sells its products to

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Gerard Appliances, Inc., is a small manufacturer of washing machines and dryers. It sells its products to large, established discount retailers that market the appliances under their own names. Gerard generally sells the appliances on trade credit terms of n/60, but if a customer wants a longer term, it will accept a note with a term of up to nine months. At present, the company is having cash flow troubles and needs $10 million immediately. Its Cash balance is $400,000, its Accounts Receivable balance is $4.6 million, and its Notes Receivable balance is $7.4 million. How might Gerard Appliances use its accounts receivable and notes receivable to raise the cash it needs? What are its prospects for raising the needed cash?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Principles of Accounting

ISBN: 978-1133626985

12th edition

Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson

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