It relates to Income Effects of Receivables Transactions.
Sandburg Company needs additional cash for its business. Sandburg has decided to use its accounts receivable to raise additional cash and has asked you to evaluate the income statement effects of the subsequent in the contemplated transactions. On July 1, 2012 Sandburg assigned $400,000 of accounts receivable to Keller Finance Company. Sandburg received an advance form Keller of 80 percent of the assigned accounts receivable less a commission of 3 percent on the advance. Prior to December 31, 2012 Sandburg collected $220,000 on the assigned accounts receivable and remitted $232,720 to Keller, $12,720 of which represented interest on advance from Keller. On 1st December, 2012 Sandburg sole $300,000 of net accounts receivable to Wunsch Company for $270,000. The receivables were sold outright on a without recourse basis. On 21st December, 2012 an advance of $120,000 was received from First Bank by pledging $160,000 of Sandburgs accounts receivable. Sandburgs first payment to First Bank is due on 30th January, 2013. Create a schedule showing the income statement effects for the year ended 31st December, 2012 as a result of the above facts.