On january 1, 2019, harter company had accounts receivable $139,000, notes receivable $25,000, and allowance for doubtful accounts $13,200. the note receivable is from willingham company. it is a 4-month, 9% note dated december 31, 2013. harter company prepares financial statements annually at december 31. during the year, the following selected transactions occurred.
jan. 5 sold $20,000 of merchandise to sheldon company, terms n/15.
20 accepted sheldon company’s $20,000, 3-month, 8% note for balance due.
feb. 18 sold $8,000 of merchandise to patwary company and accepted patwary’s $8,000, 6-month, 9% note for the amount due.
apr. 20 collected sheldon company note in full.
30 received payment in full from willingham company on the amount due.
may 25 accepted potter inc.’s $6,000, 3-month, 7% note in settlement of a past-due balance on account.
aug. 18 received payment in full from patwary company on note due.
25 the potter inc. note was dishonored. potter inc. is not bankrupt; future payment is anticipated.
sept. 1 sold $12,000 of merchandise to stanbrough company and accepted a $12,000, 6-month, 10% note for the amount due.

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51