Homework Answers
Asset - D18000.
Explanation: one hand sale of account receivable sold which leads to decrease in asset of 600000 and in other hand 92% advance received ( i.e Huskie paying cash ) which leads to increase in the cash balance and reserve receivable from Huskie 5% (i.e 600000×5%=30000.
Hence net affect on asset
a. Decrease in asset - 600000
b. Increase in asset
i.Advance 92% received - 552000
ii.5% reserve receivable - 30000.
Liability - I14400
Explanation: In the recourse factoring seller has the liability to repurchase the account receivable if account receivable found to be bad debts.
In the given case there is a 2.4% (600000×2.4%= 14400) is the recourse liability which leads to increase in the liability.
Equity - D18000
Explanation: Finance fees of 3% ( 600000×3%= 18000) leads to decrease in profit and decline in profit leads to equity.
Asset - I14400
Explanation: If bad debts are not recovered from the factory, Mini corporation will repurchase such account receivable and this will leads to increase in asset
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what is the effect on assets ans total liabilities ans total stockhokders equity this question was...
USE THE FOLLOWING INFORMATION TO ANSWER THE NEXT (3) QUESTIONS: Mini Corporation factored, with recourse, $600,000...
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