The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble'spast-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield without recourse. Bramble'scontroller estimates that the fair value of uncollectible accounts is $163,000. Sheffield will charge Bramble 9% of the total receivablesbalance as a financing fee, and will withhold an initial amount of 10%. The transaction is treated as a sale.(a)-Your answer is partially correct.Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd.Net proceedsLoss Von disposal of receivables$$1493200326800

Sales are made on cash and credit basis. The amount to be collected from sales made on credit basis…

Answered: The controller for Bramble Corporation…

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.)
The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10% (a) Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd. Net proceeds ✓on disposal of receivables S $
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…
Pearl Woodcrafters sells $227,500 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 6% and retains an amount equal to 5% of accounts receivable. Pearl estimates that the recourse liability has a fair value of $4,695 instead of $9,390 estimated earlier. Prepare the journal entry for Pearl to record the sale. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit What are the effects of this change in the value of the recourse liability on Pearl's financial statements? Pearl's income will be * by $ Pearl's will be * by $
5. Packwood, Inc. factors $250,000 of its accounts receivable to M&B Finance with recourse. M&B charges a fee of 1% and withholds 10% of the face amount of the receivables to cover possible uncollectible accounts and sales returns. The bank deducts the fee from the cash given to Packwood at the outset of the arrangement. Packwood estimates the fair value of the recourse obligation is equal to $6,000. Packwood estimates the fair value of the 10% of the face amount of receivables equals $22,500. Packwood does not retain control over the factored receivables. Prepare any journal entries Packwood, Inc. would make to record the factoring.
Sheldon factored $200,000 of accounts receivable with Penny Factors on a with recourse basis. Penny assesses a 5% finance charge. Sheldon estimates the fair value of the recourse obligation to be $1,500. Penny Factors pays Sheldon 90% of the factored receivables. Sheldon estimates that the value of the final 10% of receivables is $16,000. Journalize the sale of the receivables.
Subject :- Accounting
2
ABC Company decides to sell a part its portfolio of trade receivables to the factoring company. The following relates to the factored receivables: Carrying amount of receivables ₱4,000,000 Fair value of the receivables 4,040,000 Cash received from factoring 3,830,000 The related contract stipulates that: Payment for the receivables ₱3,800,000 Payment for the Guarantee 30,000 According to the guarantee, ABC Company agrees to refund the credit losses from the portfolio of receivables up to ₱450,000 to the factoring company. The necessary journal entry or entities if receivables to record the factoring would include a. Debit to Cash ₱3,800,000 b. Debit to Loss on sale of receivable, ₱200,000 c. Credit to Liability, ₱480,000 d. Debit to Receivable from Factor, ₱25,000
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The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) - Your answer is partially correct Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd Net proceeds 1657500 Loss on disposal of receivables $ 233500 i
Vinu Bhai

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