Question: Question 3 (10 marks) Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets

Question 3 (10 marks) Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $2,554,000 and current liabilities of $1,338,000. Accounts receivable are $750,400 of the current assets. Wilson Corporation is considering transferring $350,000 of the accounts receivable with a 90-day term to a financial institution. There are no bad debts associated with these accounts receivable. Proceeds of $308,500 are expected from the transaction. Required: 1) Prepare the journal entry to record the transfer as a sale/derecognition. 2) Prepare the journal entry to record the transfer as a borrowing. General Journal Ref Account Titles and Explanation Debit Credit 3) Recalculate the current ratio reflecting first the sale/derecognition and then borrowing. Round your answers to two decimal places

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Prepare amortization schedules that indicate Sanyals effective interest expense for each interest period during the term to maturity. Note: Do not round intermediate calculations. Enter your answers...

Question 4 (6 marks) Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $638,500 and current...

Question 4 Wilson Corporation reports a current ratio of 2-to-1 in its 2019 financial statements. The statement of financial position shows current assets of $1,021,600 and current liabilities of...

Belanger Ltd. reports a current ratio of 2-to-1 in its 20X2 financial statements. The statement of financial position shows current assets of $2,549,500 and current liabilities of $1,320,000....

Belanger Ltd . reports a current ratio of 2 - to - 1 in its 2 0 X 2 financial statements. The statement of financial position shows current assets of $ 2 , 5 6 6 , 0 0 0 and current liabilities of $...

intermediate accounting. Revenue Recognition Belanger Ltd reports a current ratio of 2-to-1 in its 20X2 financial statements. The statement of financial position shows current assets of $2,564,500...

Belanger Ltd. reports a current ratio of 2-to-1 in its 20X2 financial statements. The statement of financial position shows current assets of $2,570,500 and current liabilities of $1,404,000....

uestion 3 Cook Corporation reports a current ratio of 2-t0-1 in its 2017 financial statements. The statement of financial position shows current assets of $2,554,000 $1,338,000. Accounts receivable...

please show how you worked it out ( calculations) / 10 75% QUESTION 3 (20 MARKS) REQUIRED Use the information provided below to prepare the following Pro Forma statements: Statement of Comprehensive...

Question 3 (10 marks) Panorama Corporation acquired 80% of Scann Corporation shares on January 1, 2019 for $1,400,000 cash, when Scann's stockholders equity was $1,250,000. On that date, the book...

help please Lincraft Corp. reports a current ratio of 3-to-1 in its 202 financial statements. The statement of financial position shows current assets of $3,137,500 and current liabilities of...

Explain what is meant by making an estimate of the total misstatement in a segment and in the overall financial statements. Why is it important to make these estimates? What is done with them?

The net income reported on the income statement for the current year was $210,000. Depreciation recorded on equipment and a building amounted to $62,500 for the year. Balances of the current asset...

Evaluate the limit: lim x 9 x 2 - 8 x - 9 x - 9

(a) Find a fundamental matrix for the given system of equations. (b) Also find the fundamental matrix (1) satisfying (0) = I.

Define global change, What are some of the major global changes occurring, and what aspects of wild plant ecology and biology may be altered by climate change? Include examples in your answer

13. Show that (1) = V(1)V-(), where (t) and V(t) are as defined in this section.

(a) Find a fundamental matrix for the given system of equations. (b) Also find the fundamental matrix d(1) satisfying (0) = I. %3D

Simmons Industries is considering two alternative working capital investment and financing policies. Policy A requires the firm to keep its current assets at 70% of forecasted sales and to finance...

please try to give correct answer 3 8 3 . Wie gehen Unternehmen mit den Markterwartungen im Hinblick auf Dividenden nderungen um ?

Explain how changes in competitive challenges (e.g., product market competition and globalization) are influencing labormanagement interactions. page 660

Identify the recent changes that have caused companies to expand into international markets. page 677

Describe the major labormanagement interactions: organizing, contract negotiations, and contract administration. page 635