orion-rentals-is-unable-to-collect-on-a-note-worth-25000-and-has-accumulated-interest-of-250-it-conv

Question

Orion Rentals is unable to collect on a note worth $\$ 25,000$ and has accumulated interest of $\$ 250 .$ It convert this note and interest to accounts receivable. After some time, Orion is still unable to collect the debt and it decides to sell the converted note to a collection agency. The collection agency will pay only 20$\%$ of the value of accounts receivable to Orion. What is the amount of cash paid to Orion from the collection agency?
A. $\$ 5,000$
B. $\$ 5,050$
C. $\$ 20,000$
D. $\$ 19,950$

Puneet Prajapati · Accepted Answer

Okay, so we will understand the concept of factory. However, you will understand it and you will get much a glance Knowledge of concepts. Okay, but we are discussing enough basic. What&#x27;s it but even understand your something&#x27;s up. Okay. Like to suppose Mystery says words. No, Mr C, but how much Wards off? Let&#x27;s see $500. Now what happens see, is see whether trustworthy customer previously, But now it has, You know, he has become bad in his biggest. Okay, so now Mr A approaches Mr Okay, Who is a factoring agent? Who says that? Okay, I will collect your amount from Mr C. Okay, But now I will give you 20% less to you. What it means. It means that Mr gave you recover $500 from him from Mr C. However, Mr Key, I will pay only 80% of the load and 20% is the commission. That is $400 only. Okay, So, Mr Cable recover whole 500 noticed promised to see, but will only 80% off $500 to Mr and 20% will be reductase as a commission. Okay, so that is now in the case itself that the amount that is recoverable from the customer is $25,000 less impressed. That is due to be covered. Okay. But however, this amount was unable to be collected. Okay, So, love, what happened? A factoring agent has been appointed a collecting agency has been appointed. Who collect animal. But what? It is judging Because judging what? People are sick. Okay. What? It&#x27;s charging. Discharging it? You were saying? Okay, it is charging, actually 80%. So when the person will be buried Booty company. Oh, okay. And 80% will be the meaning with college collection agency. So what will be the amount of people do the calculation you will get by his unifying zero daughters. Okay. And that matches with choice. Be so However, we have not arrived at the final solution directly. Okay, First of all, you need to understand the concept of factory bordered by that. I have also given, you know, medical example in the example itself. Okay, so you will first understand this example. Then later on, you can jump on demand. However, the MBA, right, that choice be simian solution and that soul forever. So you should thank you

Kayleah Tsai · Answer

So here you push has seen a house that is worth $240,000 your pain in both short term and long time notes. The short term notes have ah interest rate of 2% and long term notes have an interest rate of 2.5%. And your total interest rate after one year is 5050 and $5500. So now we&#x27;re trying to figure out how much you&#x27;re going to pay in short term notes and how much you&#x27;re going to pay in long term nuts. So in total, the short time in long term notes must add up to the amount that you purchased for $240,000 and now we can write equations for the interest. We know that interest is equal to principal times. Break times time. In this case, time is simply just one year. So the interest rate or the interest I&#x27;ve been your different color. So the interest, or $5500 is equal to the amount put in short time as times of rate 0.2 plus them out 0.2 longtime l times of rate 0.25 So now we multiplies through. So we have 5500 equals. Still 55000.2 s plus 0.25 l. So I&#x27;m going to do is I&#x27;m going to solve the interest rate formula for s and then plug it back into the S plus l formula. So for L and then weakens back. So for us so basically, what I&#x27;m doing is solving this equation for s So we have 5500 minus zo board 025 l equals ill weren&#x27;t 02 s divide both sides by 0.2 and we have s equals 277,000 minus 1.25 l. Now we plugged that into the original equation. So we have 275,000 minus 1.25 l plus one l equals 240,000. So for l. So we have 275 1000 minus 0.25 l equals 240,000. Subtract 2 40 from both sides. So we get 35,000 and add 0.25 eligible size, then divide both sides by 7.25 and we have l equals 140 $1000. So now that we have l, we can sell for s because S Plus l is $240,000. So we have s plus $140,000 equals $240,000 you can see that s is equal to $100,000.

Puneet Prajapati · Answer

Okay. So people like Mr I didn&#x27;t see negative. Yeah, it is the maybe you think it&#x27;s allows the customer Cooper jays the set. Jay&#x27;s the sex in installed base subject. Don&#x27;t teaming being made. You mean shit. Okay, so be very day. Our example. Okay. However, I always write the combination off any concept. Okay, So you can refer the you can defend the concert for future reference. Okay? And for your back, a revision on So So now you think that&#x27;s understand? Digs up. Let&#x27;s suppose, Mr B. Yeah, he&#x27;s a very good person is willing to buy a house. Okay, is very cool. Buy a house, which is No, he goes to the bank. So how&#x27;s Waas work off? Let&#x27;s see $100,000. So Banks said how much gas you have in your hand or your bank deposits? So, Mr E Mr Research, I I do have one 10,000. So banks that okay, they will give you night $90,000. Okay, eyes and you. Okay. It means that if bank will be $90,000 to mystery, then bank bank will be able to recover $90,000 from history Also. So now that is, after that production, Mr A will become that. Oh, 90% that this 90,000 because 10% has been financed with only quickie off mystery. Okay, $10,000 been history percent over $100,000 and remaining 90% has been financed by bank. So bank will recover that. Come on from mystery. Okay, Mr Become that That off? Nine people saying off. But the house. Okay, so that is work the situation in bickering piece. So Louisville computing that amount of bickering is as we have $35,000 then 10% has been made as downstream it. Okay, so we have who paid nine d person with the tire of it. Okay, so the car dealer. So what? We have 31 $500. Okay, So what is that back matches with? Choice it. Okay, so this is the any truth. This is the final lots of however, before that, you need to understand the whole concept of financing agreement bordered by that, please understand the example that moved with them in solution. Okay. Otherwise, what will happen? You will get confused. So still other characteristic choices, that sort of ascension

Alex Mangiapane · Answer

So let&#x27;s say I take out a loan for $5000 in from my parents and I&#x27;m told that I have to pay them $250 per month to pay back, plus 1% on however much I still haven&#x27;t paid an interest. So how much money? How much money am I? Am I pain each month? Well, I know that I have to pay each month I will have to pay Ah $250 amount to start. But then the amendment interest is gonna go down. So after one month, I will have I will have to. I have to pay the $250. So I have have to pay. But they don&#x27;t have 1%. I have to pay on that on that 47 50 left. So I will have to pay $47.50 an interest in the second month. I&#x27;ll have to pay the 2 50 again. But now I&#x27;m down Thio $4500 left to be paid. So I only have to pay $45 interests third month I have to pay the flat to 50 again. Plus now I&#x27;ve come down to 50 40 to 50 young alone. So I have to pay for the $2 on DDE 50 cents. Mmm. Fourth month is to 50 again, and now I&#x27;m down to 4000 on it. So I don&#x27;t have to pay $40 you might see a pattern here where every month I have the 2 50 and then this amount of interest goes down. Goes down by 2 50 each time. So the six month of up to 50 flat plus $35 in interest. 2 50 plus 32.5 2 50 plus verity 2 50 plus 27.5, 2 50 plus 25 2 50 plus 22.5 and two fish. The plus 20. So this is the man I have to pay each month. And so how much interest? Um, I actually paying How much does this interest add to my total cost of paying back that 5000 love? Well, the interest rates are actually in arithmetic. They&#x27;re in arithmetic sequence, starting with 47 50 1st term is 47 50. So I can write a one. It&#x27;s 47.5. Uh, and I know my last term, which is a 12 will be wen t dollars. So I could actually use the formula for unearth Medic the sum of an arithmetic Siris ends so and over to 12 over to and then a one, which is 47.5 plus 20. I can use that, uh, putting this into a calculator. I mean that I have to pay $405 extra just from interest. And so I can also calculate how much I&#x27;ve paid how much total money I&#x27;ve paid over the those 12 months just by adding on the extra 250 well, times 12 times that I paid so to 50 times 12 is 3000. So I was paid 34 $100 3 34 or $5 after those 12 months. And yet I will still Oh, $2000 because I only knocked up 3000 from the actual loan. And so now I have to pay $2000 still plus interest every month. So moral of the story is interest can really drive up the amount that you have to pay on the line

Sid Wan · Answer

Okay, Number twenty or couple wants to have forty thousand five years for a Tom payment on the new house. How much is the deposit to that? A six point four person compounded quarterly It how to record amount in five years. So six point full person quarterly. We want to calculate the effective rate she does want. Plus far. Do I buy? We have full quarters in a year. This is their point there. Six full, minus one was chemicals for So this guy is? Yeah. One us terribly ungenerous licks by fools to the force zero point zero six five five tier by tier Search five, five, five, five Hey, so after us onto infact you write each year you got five years. Let&#x27;s assume you put a maybe X donors in the beginning. One plus zero point zero six five five five to the fifth equals forty thousand. That&#x27;s how much you want X equals, um, forty years found you wanted, bhai. One point zero six life. Five to the freaks. You fool. Mother twenty five thousand one hundred. That report life and pardon me eats how much interest will be earned. So how much interest is just he used for resulting sometimes. How much department gods? The difference is the interest you earned during those for five years. Thousands of drugs you earned while eight eight. There. Therefore time in interest. Cassie, you say can&#x27;t deposit only twenty thousand. Now, how much more words I need to complete two forty thousand after five years. So if you deposit twenty thousand, only twenty thousand. How much you earned in five years? Just put them in this form in twenty thousand would give you that many five years and you go use forty thousand to subtract this part. That&#x27;s how many you need to, um, pay in five years. Time to complete forty thousand one one zero six Life forms on the books. Two seven four seven, two point five six and he&#x27;s forty thousand. Just uncovered. For profit forty two. Fear how to pay twelve thousand five. Twenty seven point four four. It is as part of C party. Suppose it can deposit twenty thousand dollar account that pace interest continuously. What in France, right? Would they need toe accumulate the entire forty thousand five years? So that&#x27;s assumes interest rate is cape. So we have forty thousand five years originally will help twenty thousand. We might have lied to the K Team five and they just solve this equation for K. I do. I buy that to take a natural lock. Five. K equals natural of two k goes national two Divided by five Let&#x27;s look off to you in about five. He&#x27;s Hey ghost tear a point one three eight six So sixteen point eight six percent.

Charles Carter · Answer

there&#x27;s a part. A, um we have this guy, Phil. He&#x27;s looking to pay for stamps after five years, but until then he has to pay a 6% simple interest semi annually. So it&#x27;s a simple interest. So we have 4000 is the total, so we need to find 6% and 6% of 4000 is going to be $240. And since he has to pay semi annually, that this means he&#x27;s gonna break it up into two payments season, be paying $120 uh, once every six months for this stand. OK, Part B, you also sinking fund said that he can pay off the 4000 so he has s is equal to 4000. That&#x27;s the money he&#x27;s gonna need to be able to pay. Uh, he&#x27;s going Teoh. We don&#x27;t know the amount that he&#x27;s putting in. The interest rate is calculated, uh, annually, and it&#x27;s a 8%. And so the number of payments he&#x27;s gonna make into the account is equal to the number of years because it&#x27;s an annual compound. Uh, that&#x27;s gonna be five years. Okay, so you have 4000 using are sinking. Fund formula is equal to our times at 1.0 a 8% interest to the fifth power, minus one all over 0.0. Right. Okay. And that&#x27;s just going to give us 4000 is equal to our times interest. Let&#x27;s figure out what this is gonna be. So 1.8 to the fifth Power minus one. Divided by 0.8 It&#x27;s that multiplier is gonna be 5.86 on some change. If we divide that on both sides will get that his payment semi annually is gonna have to be 4000 divided by that which comes out to be calculator. $681.83. No guarantee that he has enough after five years. Okay, thank you very much.

Problem 23 Medium Difficulty

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Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

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Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting