Sale of ReceivablesHunt Incorporated sold $300,000 of accounts receivable to Gannon Factors Inc. on a withrecourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable andretains an amount equal to 6% of accounts receivable for possible adjustments. Hunt estimates arecourse liability to cover bad debts of $15,000.Subsequently, the factor collected $283,000 in cash from the accounts receivableRequired: 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)12341ALO56789RefAccount TitlesAdjusting EntriesDebitCredit12134+56 ∞ O171819

The objective of this question is to prepare the journal entry for Hunt Incorporated to record the…

Answered: Sale of Receivables Hunt Incorporated…

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 20 Purchased $39,500 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $4,500 in cash. July 8 Borrowed $63,000 cash from NBR Bank by signing a 120-day, 12%, $63,000 note payable. Paid the amount due on the note to Locust at the _?- maturity date. ? November 28 December 31 Paid the amount due on the note to NBR Bank at the maturity date. Borrowed $24,000 cash from Fargo Bank by signing a 60-day, 7%, $24,000 note payable. 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. 5. Prepare journal entries for all the preceding transactions and events. Note: Do not round your intermediate…
IA - RECEIVABLE FINANCING 17. ABC has an accounts receivable with a gross amount of P200,000 and 1% sales discount if collected within 60 days. ABC sold this account to nC20 Finance Inc under a continuing agreement, with a factoring fee and commission of 5%. Also, nC20 withheld 15% of the net accounts receivable as protection for possible merchandise returns from ABC’s client. Assuming nC20 was informed by ABC that the client has returned P10,000 worth of merchandise, and the client has paid its account fully to the bank, determine the cash received by ABC from nC20 after the full collection of client’s accounts. Round off final answer to the nearest peso.
Assume that on January 1 of the current year, with the netrealizable value of accounts receivable equal to 470,000, thecompany decided to factor 400,000 of accounts receivable toGustav Factors, Ltd. Gustav retains 6% of the amount factored as a reserve or hold back. Gustav Factors also charged Council a 4%financing fee (4% of the total factored amount). As a result, only90% of the proceeds are remitted.Instruction: Prepare the journal entry to record the factoring of400,000 of account receivable assuming that Council sold thereceivable with recourse.
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 20 Purchased $40,250 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 10%, $35,000 note payable along with paying $5,250 in cash. July 8 Borrowed $80,000 cash from NBR Bank by signing a 120-day, 9%, $80,000 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 $42,000 cash from Fargo Bank by signing a 60-day, 88, $42,000 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. 4. Determine the interest expense recorded in Year 2. Note: Do not round your Intermediate calculations. Use 360 days a…
22. On July 1, Year 10, Cabaret Corporation factored P80,000 of its accounts receivable without recourse to Playtime Company. Playtime retains 10% of the accounts receivables as an allowance for sales returns and charges a 5% commission on the gross amount of factored receivables. How much cash did Cabaret receive from factoring its receivables? a. 80,000 b. 72,000 c. 68,000 d. 76,000
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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…
The beginning Accounts Receivable and Allowance for Doubtful Accounts balances of ABC Corporation are P500,000 and P50,000. Net credit sales totaled P4,500,000 during the year while collections amounted to P4,400,000.Bad debts expense for the year is P30,000. Included in the collections was a P10,000 account that was written off in the prior year and was recovered during the current year. What is the net realizable value of the Accounts Receivable as of the end of the year? *
JKL Company factored P6,000,000 of accounts receivable to a finance entity at the beginning of current year. Control was surrendered by DEF Company. The factor accepted the accounts receivable subject to recourse for nonpayment. The fair value of the recourse obligation is P100,000. The factor assessed a fee of 3% and retained a holdback equal to 5% of the accounts receivable. In addition, the factor charged 15% interest computed on a weighted average time to maturity of the accounts receivable of 54 days. Assuming that all accounts are collected, what is the gain or (loss) on factoring the accounts receivable? *
Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $37,500 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 8 %, $35,000 note payable along with paying $2,500 in cash. July 8 Borrowed $57,000 cash from NBR Bank by signing a 120-day, 11%, $57,000 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 $24,000 cash from Fargo Bank by signing a 60-day, 9%, $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. 5. Prepare journal entries for all the preceding transactions and events. Note: Do not round your intermediate calculations. View transaction list < Journal entry worksheet 1 2 3 4 5 6 7 8 Purchased $37,500 of…
Waterway Corporation factors $260,800 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, 2025. 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 for a transfer of receivables with recourse to be accounted for as a sale. Prepare the journal entry on August 15, 2025, for Waterway to record the sale of receivables, assuming the recourse obligation has a fair value of $5,000. (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. List all debit entries before credit entries.)
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

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