Sale of Receivables Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a recourse liability to cover bad debts of $15,000. Subsequently, the factor collected $283,000 in cash from the accounts receivable Required: Part A: Prepare the journal entry for Hunt to record the sale of the receivables to Gannon. hint: you may or may not need all the debits and credits) 1 2 3 4 5 6 7 8 Ref Account Titles Adjusting Entries Debit Credit 1 2 13 4 5 6 7 8 Chart of Accounts Cash Due from Factor Loss on Sale Gain on Sale Accounts receivable Allowance for bad debts Recourse liability Interest revenue

Sale of Receivables Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a recourse liability to cover bad debts of $15,000. Subsequently, the factor collected $283,000 in cash from the accounts receivable Required: Part A: Prepare the journal entry for Hunt to record the sale of the receivables to Gannon. hint: you may or may not need all the debits and credits) 1 2 3 4 5 6 7 8 Ref Account Titles Adjusting Entries Debit Credit 1 2 13 4 5 6 7 8 Chart of Accounts Cash Due from Factor Loss on Sale Gain on Sale Accounts receivable Allowance for bad debts Recourse liability Interest revenue

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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Required information [The following information applies to the questions displayed below] Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 28 Purchased $37,508 of merchandise on credit fron Locust, terms n/30. May 19 Replaced the April 28 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $2,500 in cash. July 8 Borrowed $66,080 cash from NBR Bank by signing a 120-day, 12%, $66,088 note payable. Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. November 28 Borrowed $24,08e cash from Fargo Bank by signing a 60-day, 8%, $24,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 Paid the amount due on the note to Fargo Bank at the maturity date.
Sale of Receivables Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a recourse liability to cover bad debts of $15,000. Subsequently, the factor collected $283,000 in cash from the accounts receivable Required: Part A: Prepare the journal entry for Hunt to record the sale of the receivables to Gannon. (hint: you may or may not need all the debits and credits) 1 2 3 41 A LO 5 6 7 8 9 Ref Account Titles Adjusting Entries Debit Credit 1 2 13 4 +56 ∞ O 17 18 19
6. Celeste Company provided the following transactions, among others, for the current year. 1 Sold merchandise to XYZ Company for P500,000, terms 2/10, n/30. 2 the above account to Solid Finance under the following agreement June 1 Commission based on gross amount 5%. Hold back based on gross amount 25%. 9 Granted XYZ Company a credit allowance of P50,000 for damage in the shipment. 11 XYZ Company paid in full its account to Solid Finance. 15. Final settlement was made with Solid Finance. How much was the total amount received from the factoring? а. 500,000 b. 350,000 c. 416,000 d. 375,000
Alpesh bhaliya
Receivables
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J Hotheads Unlimited sold $440,000 of accounts receivable to Frozen Factors Inc. on a with recourse basis. Frozen assesses an 11% finance charge of the amount of accounts receivable and retains an amount equal to 8% of accounts receivable to cover probable adjustments. Prepare the journal entry for Hotheads to record the sale of the accounts receivable to Frozen assuming that the recourse liability has a fair value of $26,000
Show solutions Hope World Company factored Php600,000 of accounts receivable to Hangsang Company on July 1, 2021. Control was surrendered by Hope World. Hangsang accepted the receivables subject to recourse for nonpayment. Hagsang assessed a fee of 2% and retains a holdback equal to 5% of the accounts receivable. the fair value of the recourse obligation is Php12,000. 17. Hope World will receive and record cash of a.Php546,000 b. Php558,000 c. Php570,000 d. Php576,000 What amount of loss on factoring should Hope World company recognize? a. None b. 12,000 c. 24,000 d. 42,000
Receivables
11, please read the question carefully and follow the instructions. thanks
Sale of Receivables Hunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates a recourse liability to cover bad debts of $15,000. Subsequently, the factor collected $283,000 in cash from the accounts receivable Part B: Prepare the journal entry FOR HUNT to settle the transaction after the collection of the receivables. (hint: you may or may not need all the debits and credits) Chart of Accounts Cash Due from Factor Loss on Sale Gain on Sale Accounts receivable Allowance for bad debts Recourse liability Interest revenue
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