AGRI 03382 Study Guide - Quiz Guide: Clethra Alnifolia, Cornus Sericea, Cotoneaster

On June 30, 2016, Blondie Fixtures was considering alternatives to bolster its cash position. Option One called for transferring $420,000 in accounts receivable to Dogwood Finance Company without recourse for a 4% fee. Option Two calls for Blondie to transfer the $420,000 in receivables to Dogwood with recourse. Dogwood's charges a 3% fee for receivables factored with recourse. Option Two meets the conditions to be considered a sale, but Blondie estimates a $3,200 recourse liability. Under either option, Dogwood will immediately remit 85% of the factored receivables to Blondie, and retain 15%. When Dogwood collects the remaining receivables, it remits the amount, less the fee, to Blondie. Blondie estimates that the fair value of the final 15% of the receivables is $26,000 (ignoring the factoring fee).

Jane goes to a juice bar with her friend Neil. She is thinking of ordering her favorite drink, 7/8 orange juice and 1/8 cranberry juice, but the drink is not on the menu, so she decides to order a glass of orange juice and a glass of cranberry juice and do the mixing herself. The drinks come in two identical glasses to avoid spilling while mixing the two juices. Jane shows Neil something she learned that day in class. She drinks about 1/8 of the orange juice, then takes the straw from the glass containing cranberry juice, sucks up just enough cranberry juice to fill the straw, and while covering the top of the straw with her thumb, carefully bends the straw and places the end over the orange juice glass. After she releases her thumb, the cranberry juice flows through the straw into the orange juice glass. Jane successfully designed a siphon.

Find the time it takes Jane to transfer enough cranberry juice into the orange juice glass to make her favorite drink if . Assume that the flow rate of the liquid is constant, and that the glasses are cylindrical with a diameter of 7.0 centimeters and are filled to aheight of 14.0 centimeters. Take the diameter of the straw to be 0.4 centimeters.   

On June 30, 2016, Blondie Fixtures was considering alternativesto bolster its cash position. Option One called for transferring$400,000 in accounts receivable to Dogwood Finance Companywithout recourse for a 5% fee. Option Two callsfor Blondie to transfer the $400,000 in receivables to Dogwoodwith recourse. Dogwood's charges a 4% fee forreceivables factored with recourse. Option Two meets the conditionsto be considered a sale, but Blondie estimates a $3,000 recourseliability. Under either option, Dogwood will immediately remit 90%of the factored receivables to Blondie, and retain 10%. WhenDogwood collects the remaining receivables, it remits the amount,less the fee, to Blondie. Blondie estimates that the fair value ofthe final 10% of the receivables is $25,000 (ignoring the factoringfee).

Required:

1. Prepare any necessary journal entry or entries if receivablesare factored under Option One.

2. Prepare any necessary journal entry or entries if receivablesare factored under Option Two.