Vaughn Manufacturing is a growing company whose ability to raise capital has not been growing as quickly as its expanding assets and sales. Vaughn Manufacturing’s local banker has indicated that the company cannot increase its borrowing for the foreseeable future. Vaughn Manufacturing’s suppliers are demanding payment for goods acquired within 30 days of the invoice date, but Vaughn Manufacturing’s customers are slow in paying for their purchases (60–90 days). As a result, Vaughn Manufacturing has a cash flow problem. Vaughn Manufacturing needs $144,200 to cover next Friday’s payroll. Its balance of outstanding accounts receivable totals $838,100. To alleviate this cash crunch, the company sells $161,000 of its receivables. Record the entry that Vaughn Manufacturing would make. (Assume a 2% service charge.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.) ACCOUNT TITLES AND EXPLANATION account title debit credit - - - - - - - - -
Vaughn Manufacturing is a growing company whose ability to raise capital has not been growing as quickly as its expanding assets and sales. Vaughn Manufacturing’s local banker has indicated that the company cannot increase its borrowing for the foreseeable future. Vaughn Manufacturing’s suppliers are demanding payment for goods acquired within 30 days of the invoice date, but Vaughn Manufacturing’s customers are slow in paying for their purchases (60–90 days). As a result, Vaughn Manufacturing has a
Vaughn Manufacturing needs $144,200 to cover next Friday’s payroll. Its balance of outstanding
Record the entry that Vaughn Manufacturing would make. (Assume a 2% service charge.) (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
ACCOUNT TITLES AND EXPLANATION
account title debit credit
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