Compute the amount the company can borrow

Assignment Help Accounting Basics
Reference no: EM133015712

Question - A company has a revolving line of credit with an asset-based lender for a maximum amount of $10 million.

The agreement calls for an "advance rate" of 75% of eligible receivables and 50% of eligible inventory.

The agreement provides that eligible receivables consist of balances that are not over 60 days old and that eligible inventories consists only of finished goods.

The accounts receivable at the end of the period is $7.5 million with $500,000 over 90 days old.

Inventory is $8 million of which $6 million is finished goods.

Compute the amount the company can borrow at this time on the revolving credit line to the nearest dollar.

Reference no: EM133015712

Questions Cloud

Prepare a flexible budget performance report : Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September
Should you accept the investment : If the required rate of return is 15.5 percent, should you accept the investment based solely on the internal rate of return rule? Why or why not
Calculate shortage or overage percent : Question - Calculate shortage or overage percent, given the following information: Closing physical inventory $77,700 and Markdowns $15,290
Determine what portions to salvage : Determine what portions to salvage if you wish. Just don't constrain us to the old system! Requiredthose position you sympathise with the most.
Compute the amount the company can borrow : Inventory is $8 million of which $6 million is finished goods. Compute the amount the company can borrow at this time on the revolving credit line
Create the general journal entries to record transactions : Martha, owner of Mum's Pie Shop deposited $20,000 of cash to start the business. Create the general journal entries to record transactions
What is the required treatment of each of the events : ADVANCED FINANCIAL REPORTING - What is the required treatment of each of the below events in the financial statements
Prepare a flexible budget for the actual units : Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume that depreciation is a fixed cost
How large a check must you have written : Assume that you purchased an outstanding Lex bond on March 1, 2023, when the going rate of interest was 15.5 percent. How large a check must you have written

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the ytm of the competitors bond you may use a

introduction you will assume that you still work as a financial analyst for airjet best parts inc. the company is

  Determine equivalent units of production for conversion cost

Dorchester uses the weighted average method. Use this information to determine for March 2019 the equivalent units of production for conversion costs

  Explain where the Canadian Auditing Standards were violated

Marc was the audit supervisor in charge of the audit of a mining company. Clearly explain where the Canadian Auditing Standards were violated

  You have accumulated 800000 and are looking for the best

you have accumulated 8000.00 and are looking for the best rate of return that can be earned over the next year. a bank

  Determine the source of funding that you would choose

Determine the source of funding that you would choose and the currency in which the loan would be denominated. Provide a rationale for your response.

  Prepare necessary entry for tucker to record the transaction

Prepare the journal entry required if the note is dishonoured on April 30, 2019. For those boxes in which no entry is required, leave the box blank.

  Discuss the main differences between us gaap and ifrs

Discuss the main differences between US GAAP and IFRS. Why do you think these differences remain

  Journalize the treasury stock transactions

Prepare the stockholders' equity section for Gentry Corporation at December 31, 2010.

  To simulate the cash flows from the new car model

Rerun the new car simulation from Example 11.5, but now use the RISKSIMTABLE function appropriately to simulate discount rates of 5%, 7.5%, 10%, 12.5%, and 15%. Comment on how the outputs change as the discount rate decreases from the value used ..

  Prepare all the journal entries relating to the building

For each of the independent situations, prepare all the journal entries relating to the building for the fifth year. Ignore income taxes

  What amount of deferred income tax liability arising

Required: Assuming an income tax rate of 30%, what amount of Deferred Income Tax Liability arising this year must be recognized in consolidated balance sheet

  How much is the variable manufacturing cost per unit

How much is the variable manufacturing cost per unit, using the variable overhead estimated by the regression

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd