2. Account Receivable and Factoring Finance In order to resolve its cash flow problems, PT. Terang Bulan (TB) assigned Rp1. 20 billion of its accounts receivable as Bank BCA- Factoring Division (BCA Factoring) on August 1, 2020. TB received 85% of the assigned accounts receivable less a service charge on 2% of the cash received. TB was also charged 13% interest annually on the outstanding loan balance. By August 31, TB had collected Rp 760 million, and remitted this plus the interest to date to BCA-Factoring. Required: a. Prepare journal entries to record the above assignment transactions on TB's books. b. If TB collected an additional Rp200 million on outstanding accounts and remitted this to BCA- Factoring on 30 Sept 2020, how much interest must be paid in addition? C. Prepare the account receivable section that would appear on the 3rd quarter interim balance sheet (per 30 Sept). Include all transactions that have been described in the problem.

2. Account Receivable and Factoring Finance In order to resolve its cash flow problems, PT. Terang Bulan (TB) assigned Rp1. 20 billion of its accounts receivable as Bank BCA- Factoring Division (BCA Factoring) on August 1, 2020. TB received 85% of the assigned accounts receivable less a service charge on 2% of the cash received. TB was also charged 13% interest annually on the outstanding loan balance. By August 31, TB had collected Rp 760 million, and remitted this plus the interest to date to BCA-Factoring. Required: a. Prepare journal entries to record the above assignment transactions on TB's books. b. If TB collected an additional Rp200 million on outstanding accounts and remitted this to BCA- Factoring on 30 Sept 2020, how much interest must be paid in addition? C. Prepare the account receivable section that would appear on the 3rd quarter interim balance sheet (per 30 Sept). Include all transactions that have been described in the problem.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

2. Account Receivable and Factoring Finance
In order to resolve its cash flow problems, PT. Terang Bulan (TB) assigned Rp1.20 billion
of its accounts receivable as Bank BCA- Factoring Division (BCA Factoring) on August
1, 2020. TB received 85% of the assigned accounts receivable less a service charge on
2% of the cash received. TB was also charged 13% interest annually on the outstanding
loan balance. By August 31, TB had collected Rp 760 million, and remitted this plus the
interest to date to BCA-Factoring.
Required:
a. Prepare journal entries to record the above assignment transactions on TB's
books.
b. If TB collected an additional Rp200 million on outstanding accounts and
remitted this to BCA- Factoring on 30 Sept 2020, how much interest must be
paid in addition?
C. Prepare the account receivable section that would appear on the 3rd quarter
interim balance sheet (per 30 Sept). Include all transactions that have been
described in the problem.

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