Question

Henry Co. assigned $400,000 of accounts receivable to Easy Finance Co. as security for a loan of $335,000. Easy charged a 2% commission on the amount of the loan; the interest rate on the note was 10%. During the first month, Henry collected $110,000 on assigned accounts after deducting $380 of discounts. Henry accepted returns worth $1,350 and wrote off assigned accounts totaling $2,980. Reference: Ref 7-2 The amount of cash Henry received from Easy at the time of the transfer was

Answer 1

Answer:

$328,300

Explanation:

Amount of cash received by Henry from Easy at the time of the transfer was = Amount of Loan - Commission

= $335,000 - ($335,000*2%)

= $335,000 - $6,700

= $328,300

Thus, the amount of cash received by Henry from Easy at the time of the transfer was $328,300