Mountain High Ice Cream Company transferred $79,000 of accounts receivable to the Prudential Bank. The transfer was made withrecourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. Whenthe bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of$6,900). Mountain High anticipates a $4,900 recourse obligation. The bank charges a 3% fee (3% of $79,000), and requires thatamount to be paid at the start of the factoring arrangement.Required:Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.View transaction listJournal entry worksheet1Record the transfer of accounts receivable.Note: Enter debits before credits.Event1General JournalDebitCredit>

The objective of the question is to prepare the journal entry to record the transfer of accounts…

Answered: Mountain High Ice Cream Company…

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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Vision Importing Company engaged in the following transactions involving promissory notes: Jul 2 Sold engines to morgan company for $180,000 to exchange for a 90-day, 12 percent promissory note. July 15 Sold engines to level company for $96,000 in exchange for a 90-day, 14 percent note. July 30 sold engines to level company for $90,000 in exchange for a 90-day, 11 percent note. Required: For each of the notes, determine the (a) maturity date, (b) interest on the note, and (c) maturity value. (Round to the nearest cent.) Assume that the fiscal year for Vision Importing ends on August 31. How much interest income should be recorded on that date? (Round to the nearest cent.)
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White Corporation has entered into an agreement to transfer accounts receivable to Murphy Company. Under the terms of this agreement, White receives 80% of the value of all the transferred accounts receivable (to reflect credit risk) and is charged a 1% service charge, which is based upon the dollar amount of transferred receivables. Interest is charged at an annual interest rate of 12% of any outstanding loan balance. The transferred receivables will continue to be collected by White with any cash flows being remitted to Murphy at the end of each month. White is not allowed to transfer the receivables to anyone else. White normally transfers its accounts receivable. The following selected 2019 transactions relate to this agreement: Dec 1 Accounts receivable of $160,000 are transferred. 11 A sales return of $1,000 on a transferred account is made. 31 Collections are made on $82,000 of the transferred accounts receivable plus interest for the month of December. This amount is…
Mountain High Ice Cream Company reports under IFRS. Mountain High transferred $70,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 80% of the factored amount to Mountain High and retains 20% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,000). Mountain High anticipates a $4,000 recourse obligation. The bank charges a 1% fee (1% of $70,000), and requires that amount to be paid at the start of the factoring arrangement. Mountain High has transferred control over the receivables, but determines that it still retains substantially all risks and rewards associated with them. Required: Prepare the journal entry to record the transfer on the books of Mountain High, considering whether the sale criteria under IFRS have been met. Note: If no entry is required for a transaction/event, select "No journal entry…
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Mountain High Ice Cream Company transferred $66,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,600). Mountain High anticipates a $3,600 recourse obligation. The bank charges a 2% fee (2% of $66,000), and requires that amount to be paid at the start of the factoring arrangement. Required: Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 Record the transfer of accounts receivable. Note: Enter debits before credits. General Journal Debit Credit Event 1 Cash Loss…
Subject :- Accounting
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