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- On its second year of operations, POP Co. thought of expanding its business. In order to generate additional cash necessary for this expansion, the company, on September 1, 2021, factored P500, 000 of accounts receivable to COLA Finance Company. Factoring fee was 10% of the receivables purchased. The COLA Finance Co. withheld 6% of the purchase price as protection against sales returns and allowances. On November 1, 2021, accounts receivable amounting to P1, 500, 000 was assigned to City Bank as collateral on P900, 000, 20% annual interest rate of loan. A 4% finance charge was deducted in advance. Other data as of December 31, 2020 relating to accounts receivable follows:Sales all on account during the year P5, 000, 000Sales return and allowances 150, 000Accounts written off on assigned receivables 50, 000Accounts receivables, January 1, 2021 800, 000Allowance for bad debts- unadjusted (credit) 16, 750Estimated uncollectible 2% of accounts receivablesCollections of Receivables: On…On its second year, PAGTALUNAN, Inc. thought of expanding its business. In order to generate additional cash necessary for this expansion, the company on September 1, 2021, factored P200,000 of accounts receivable to OCANA. Factoring fee was 10% of the receivables purchased. OCANA Company withheld 5% of the purchase price as protection against sales returns and allowances. On November 2, 2021, accounts amounting to P500,000 was assigned to MONDALO Bank as a collateral on a P300,000, 20% annual interest rate loan. A 3% finance charge was deducted in advance. As of December 31, 2021, data relating to accounts receivable follows: Allowance for doubtful accounts – credit P6,700 Estimated uncollectible as a percentage of accounts receivables 2% Accounts receivable excluding factored and assigned accounts 95,000 Collections on assigned accounts None 31. What is the total cash generated by PAGTALUNAN Company from factoring and assigning the accounts receivable? 32. What…10- SK Inc, factors $400,000 of accounts receivable with Mars Finance Company on a without recourse basis on July 1,2020. The receivables records are transferred to Mars Finance, which will receive the collections. Mars Finance assesses a finance charge of 1 ½% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.Instructions:a) Prepare the journal entry on July1,2020, for SK Inc. to record the sale of receivables without recourse.b) Prepare the journal entry on July1,2020, for Mars Finance Company. to record the purchase of receivables without recou
- View Policies Current Attempt in Progress Pina Corp. factors $ 428,000 of accounts receivable with Grouper Finance Corporation on a without recourse basis on July 1, 2020. The receivables records are transferred to Grouper Finance, which will receive the collections. Grouper Finance assesses a finance charge of 1.70% of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. (a) Prepare the journal entry on July 1, 2020, for Pina Corp. to record the sale of receivables without recourse. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1, 2020 Save for Later Attempts: 0 of 1 used Submit Answer (b)On its second year of operations, BBQ Co. thought of expanding its business. In order to generate additional cash necessary for this expansion, the company on September 1, factored P400,000 of accounts receivable to Lechon Financing Co. Factoring fee was 5% of the receivables purchased. The finance company withheld 2% of the purchase price as protection against sales returns and allowances. On November 2, accounts receivable amounting to P500,000 was assigned to Ngohiong Bank as collateral on P300,000, 10% annual interest rate loan. A 3% finance charge was deducted in advance. The total cash generated from factoring and assigning the accounts receivable was P663,400 P633,400 P657,400 P663,000On its second year of operations, Victorias Co. thought of expanding its business. In order to generate additional cash necessary for this expansion, the company on September 1, 2009, factored P200,000 of accounts receivable to Escalante Finance Co. Factoring fee was 10% of the receivables purchased. The Finance Co. with-held 5% of the purchase price as protection against sales returns and allowances. On November 2, 2009, accounts receivable amounting to P500,000 was assigned to La Carlota Bank as collateral on P300,000, 20% annual interest rate loan. A 3% finance charge was deducted in advance. As of December 31, 2009, data relating to accounts receivable follows: Allowance for doubtful accounts – P6,700 (credit) Estimated uncollectibles – 2% of accounts receivable Accounts receivable excluding factored and assigned accounts – P95,000 Collections on assigned accounts – none The total cash generated from factoring and assigning the accounts receivable was A. P402,000 B.…
- JFK Corp. factors $300,000 of accounts receivable with LBJ Finance Corporation on a without recourse basis on July 1, 2020. The receivables records are transferred to LBJ Finance, which will receive the collections. LBJ Finance assesses a finance charge of 1½% of the amount of accounts receivable and retains an amount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. Instructions a. Prepare the journal entry on July 1, 2020, for JFK Corp. to record the sale of receivables without recourse. b. Prepare the journal entry on July 1, 2020, for LBJ Finance Corporation to record the purchase of receivables without recourse.Current Attempt in Progress Skysong Corporation factors $252,500 of accounts receivable with Kathleen Battle Financing, Inc. on a with recourse basis. Kathleen Battle Financing will collect the receivables. The receivables records are transferred to Kathleen Battle Financing on August 15, 2020. Kathleen Battle Financing assesses a finance charge of 2% of the amount of accounts receivable and also reserves an amount equal to 4% of accounts receivable to cover probable adjustments. (b) Assume that the conditions are met fora transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2020, for Skysong to record the sale of receivables, assuming the recourse obligation has a fair value of $4,390. (If no entry is requlred, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically Indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit…Clariza Frozen Goods Inc. opened its business on January 1, 2020. The Company has the followingtransactions during the year:• Sales (cash and credit) during the year amounted P5,000,000. Ninety percent of these were madeon credit.• The Company granted discounts to its customers as follows:o 3/10, n/30o 2/15, n/30o 1% for all cash customers• Cash received from customers (deposited with Jennifer Bank) amounting to P3,425,000 consistedof:✓ Cash customers P495,000✓ Customers paying within 10 days 1,940,000✓ Customers paying within 15 days 490,000✓ Customers not availing the discounts 500,000• Merchandise returns amounted to P500,000, all related to credit sales.• The Company provided for 2% of its net credit sales as doubtful accounts.Unadjusted balances of some of the Company’s accounts as at December 31, 2020 before closing its booksare as follows:Cash in bank per ledger - Charles Bank P1,500,000Cash in bank per bank statement - Charles Bank 1,775,000Current account - Jennifer Bank…
- Clariza Frozen Goods Inc. opened its business on January 1, 2020. The Company has the followingtransactions during the year:• Sales (cash and credit) during the year amounted P5,000,000. Ninety percent of these were madeon credit.• The Company granted discounts to its customers as follows:o 3/10, n/30o 2/15, n/30o 1% for all cash customers• Cash received from customers (deposited with Jennifer Bank) amounting to P3,425,000 consistedof:✓ Cash customers P495,000✓ Customers paying within 10 days 1,940,000✓ Customers paying within 15 days 490,000✓ Customers not availing the discounts 500,000• Merchandise returns amounted to P500,000, all related to credit sales.• The Company provided for 2% of its net credit sales as doubtful accounts.Unadjusted balances of some of the Company’s accounts as at December 31, 2020 before closing its booksare as follows:Cash in bank per ledger - Charles Bank P1,500,000Cash in bank per bank statement - Charles Bank 1,775,000Current account - Jennifer Bank…Clariza Frozen Goods Inc. opened its business on January 1, 2020. The Company has the followingtransactions during the year:• Sales (cash and credit) during the year amounted P5,000,000. Ninety percent of these were madeon credit.• The Company granted discounts to its customers as follows:o 3/10, n/30o 2/15, n/30o 1% for all cash customers• Cash received from customers (deposited with Jennifer Bank) amounting to P3,425,000 consistedof:✓ Cash customers P495,000✓ Customers paying within 10 days 1,940,000✓ Customers paying within 15 days 490,000✓ Customers not availing the discounts 500,000• Merchandise returns amounted to P500,000, all related to credit sales.• The Company provided for 2% of its net credit sales as doubtful accounts.Unadjusted balances of some of the Company’s accounts as at December 31, 2020 before closing its booksare as follows:Cash in bank per ledger - Charles Bank P1,500,000Cash in bank per bank statement - Charles Bank 1,775,000Current account - Jennifer Bank…Clariza Frozen Goods Inc. opened its business on January 1, 2020. The Company has the followingtransactions during the year:• Sales (cash and credit) during the year amounted P5,000,000. Ninety percent of these were madeon credit.• The Company granted discounts to its customers as follows:o 3/10, n/30o 2/15, n/30o 1% for all cash customers• Cash received from customers (deposited with Jennifer Bank) amounting to P3,425,000 consistedof:✓ Cash customers P495,000✓ Customers paying within 10 days 1,940,000✓ Customers paying within 15 days 490,000✓ Customers not availing the discounts 500,000• Merchandise returns amounted to P500,000, all related to credit sales.• The Company provided for 2% of its net credit sales as doubtful accounts.Unadjusted balances of some of the Company’s accounts as at December 31, 2020 before closing its booksare as follows:Cash in bank per ledger - Charles Bank P1,500,000Cash in bank per bank statement - Charles Bank 1,775,000Current account - Jennifer Bank…