Radisson Company requires additional cash for its

business Radi
Radisson Company requires additional cash for its business. Radisson has decided to use its
accounts receivable to raise the additional cash and has asked you to determine the income
statement effects of the following contemplated transactions.1. On July 1, 2008, Radisson
assigned $400,000 of accounts receivable to Stickum Finance Company. Radisson received an
advance from Stickum of 85% of the assigned accounts receivable less a commission of 3% on
the advance. Prior to December 31, 2008, Radisson collected $220,000 on the assigned
accounts receivable, and remitted $232,720 to Stickum, $12,720 of which represented interest
on the advance from Stickum.2. On December 1, 2008, Radisson sold $300,000 of net
accounts receivable to Wunsch Company for $250,000. The receivables were sold outright on a
without recourse basis.3. On December 31, 2008, an advance of $120,000 was received from
First Bank by pledging $160,000 of Radisson’s accounts receivable. Radisson’s first payment
to First Bank is due on January 30, 2009.InstructionsPrepare a schedule showing the income
statement effects for the year ended December 31, 2008, as a result of the above facts.View
Solution:
Radisson Company requires additional cash for its business Radi
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