Reference no: EM132508492

Question 1: Jones Inc. assigned $80,000 of accounts receivable to Squeaky Clean Finance Company for a loan of $60,000. Squeaky charged a $500 finance fee. The interest rate on the note was 8%. The note required monthly remittances. During the first month of the arrangement, Jones collected $36,000 of the assigned receivables in cash and also processed sales discounts and returns of $2,800. In addition, Jones also wrote off $1,000 of the assigned receivables as uncollectable. Based on all the prior information, what will be the total effect on Jones Inc. net income for the month?

a. Decrease of $4,800

b. Decrease of 4,700

c. Decrease of $3,700

d. Decrease of $500

e. Decrease of $9,100

f. Decrease of $1,900

g. Decrease of $900

h. Decrease of $2,800

i. Decrease of $8,100

j. Decrease of $1,000

k. Decrease of $5,300