5 Ivanhoe Distributors is a growing company whose ability to raise capital has not been growing as quickly as its expanding assets andsales. Ivanhoe's local banker has indicated that the company cannot increase its borrowing for the foreseeable future. Ivanhoe'ssuppliers are demanding payment for goods acquired within 30 days of the invoice date, but Ivanhoe's customers are slow in paying fortheir purchases (60-90 days). As a result, Ivanhoe has a cash flow problem.Ivanhoe needs $144,200 to cover next Friday's payroll. Its balance of outstanding accounts receivable totals $838,100. To alleviatethis cash crunch, the company sells $161.000 of its receivables.Record the entry that Ivanhoe would make. (Assume a 2% service charge.) (Credit account titles are automatically indented when amountis entered. Do not indent manually.)Account Titles and ExplanationCashAccounts Receivable.(To record sale of receivables to factor)Debit1577803220Credit161000

A journal entry is a basic accounting record that is used to chronologically track financial…

es. Ivanhoe's local banker has indicated that the company cannot increase its borrowing for the foreseeable ppliers are demanding payment for goods acquired within 30 days of the invoice date, but Ivanhoe's custome ir purchases (60-90 days). As a result, Ivanhoe has a cash flow problem. nhoe needs $144,200 to cover next Friday's payroll. Its balance of outstanding accounts receivable totals $8 s cash crunch, the company sells $161,000 of its receivables. cord the entry that Ivanhoe would make. (Assume a 2% service charge.) (Credit account titles are automatically entered. Do not indent manually.)

es. Ivanhoe's local banker has indicated that the company cannot increase its borrowing for the foreseeable ppliers are demanding payment for goods acquired within 30 days of the invoice date, but Ivanhoe's custome ir purchases (60-90 days). As a result, Ivanhoe has a cash flow problem. nhoe needs $144,200 to cover next Friday's payroll. Its balance of outstanding accounts receivable totals $8 s cash crunch, the company sells $161,000 of its receivables. cord the entry that Ivanhoe would make. (Assume a 2% service charge.) (Credit account titles are automatically entered. Do not indent manually.)

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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