Homework Answers
Answer :
From the given information the journal entries should be calculated as :
| Particulars | Calculation | Amount | |
| Debit | Credit | ||
| To record sale of goods on credit : | |||
| A/c receivable | $ 100,000 | ||
| Sales | $ 100,000 | ||
| To record collection of factored of accounts receivable : | |||
| Cash |
= [70,000 * 90%] - 8,400 = [70,000 * 0.90] - 8,400 = 63,000 - 8,400 = 54,600 |
$ 54,600 |
|
| Factoring expenses |
= 70,000 * 12% = 70,000 * 0.12 = 8,400 |
$ 8,400 | |
| Receivable from factor |
= 70,000 * 10% = 70,000 * 0.10 = 7,000 |
$ 7,000 | |
| A/c receivable |
= 54,600 + 8,400 + 7,000 = 70,000 |
$ 70,000 | |
| To record collection of un-factored accounts receivable : | |||
| Cash |
= 30,000 - 576 = 29,424 |
$ 29,424 | |
| Sales discount |
= 30,000 * 96% * 2% = 30,000 * 0.96 * 0.02 = 576 |
$ 576 | |
| A/c receivable |
= 100,000 - 70,000 = 30,000 |
$ 30,000 | |
| To record collection of balance factored receivable : | |||
| Cash |
= 7,000 - 132 = 6,868 |
$ 6,868 | |
| Sales discount |
= 7000 * 94% * 2% = 132 |
$ 132 | |
| Receivable from factor |
= 70,000 - [90%*70,000] = 7,000 |
$ 7,000 | |
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Brief Exercise 7-10
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and retains an amount equal to 6% of accounts receivable for
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Brief Exercise 7-10
Sheridan Incorporated factored $163,900 of accounts receivable
with Skysong Factors Inc. on a without-recourse basis. Skysong
assesses a 2% finance charge of the amount of accounts receivable
and retains an amount equal to 6% of accounts receivable for
possible adjustments.
Prepare the journal entry for Sheridan Incorporated and Skysong
Factors to record the factoring of the accounts receivable to
Skysong. (If no entry is required, select "No Entry"
for the account titles and enter 0 for the...
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need help slving this problem of Generate cash from recievable
Generating Cash from Receivables Guide Company requires additional cash for its business. Guide has decided to use its accounts receivable to raise the additional cash as follows: 1. On June 30, 2019, Guide assigned $200,000 of accounts receivable to Cell Finance Company, Guide received an advance from Cell of 85% of the assigned accounts receivable, minus a commission on the advance of 3%. Prior to December 31, 2019, Guide...
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