Question

Bramble Corp. assigned $1613000 of accounts receivable to Blossom Company as security for a loan of $1326000. Blossom charged a 2% commission on the amount of the loan; the interest rate on the note was 11%. During the first month, Bramble collected $459000 on assigned accounts after deducting $1490 of discounts. Bramble accepted returns worth $4900 and wrote off assigned accounts totaling $11870. The amount of cash Bramble received from Blossom at the time of the assignment was _________

Answer 1

$1,299,480

Step-by-step explanation:

Data provided in the question;

Amount assigned to Blossom company = $1,613,000

Loan amount = $1,326,000

Commission charged = 2% of loan amount

Thus,

Amount of commission charged = 0.02 × $1,326,000

= $26,520

Therefore,

The amount of cash Marigold received from Ivanhoe at the time of the assignment was

= Loan Amount - Commission

or

= $1,326,000 - $26,520

or

= $1,299,480

Hence,

The amount of cash Bramble received from Blossom at the time of the assignment was $1,299,480