You sold $300,000 of accounts receivable to Friendly Factors Inc. on a with recourse basis. Friendly assesses a 2% financecharge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possibleadjustments. You estimate that future uncollectible accounts total $15,000 1) How much cash will you receive as a resultof the sale? 2) How much is the gain or loss on the sale? (indicate gain or loss) 3) The journal entry to record this saleshould include which of the following? a) $18,000 DR to Due from Factor; b) $315,000 CR to accounts receivable; c) $15,000 DR to Recourse Obligation

The objective of the question is to calculate the cash received from the sale of accounts…

Answered: You sold $300,000 of accounts…

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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Wood Incorporated factored €150,000 of accounts receivable with Engram Factors Inc., Without guarantee. Engram assesses a 2% finance charge of the amount of accounts receivable Retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood Incorporated and Engram Factors to record the factoring of the accounts receivable to Engram.
Bramble Corp. factors $630,000 of accounts receivable with Marin Inc., Inc. on a with recourse basis. Marin Inc. will collect the receivables. The receivable records are transferred to Marin Inc. on August 15, 2020. Marin Inc. assesses a finance charge of 3.0% of the amount of accounts receivable and also reserves an amount equal to 5.40% of accounts receivable to cover probable adjustments. Bramble prepares financial statements under ASPE. Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2020, for Bramble to record the sale of receivables, assuming the recourse obligation has a fair value of $5,900
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Given: A dealer purchased treasury bills at 10%, 164 days, $10,000,000. What is the purchase price and discount of the dealer? Same figures that he transfer to an investor at the rate of 12%, after 6 days of purchase. What is the purchase price and discount of the investor?
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III. On April 7, 2020, Wilhelm, Inc. sold goods for $50,000 and accepted a 10%, 60-day note. On April 22, 2020, the company sold the note to a bank at a 13% discount rate. Required: Compute the amount of cash received from the sale (discounting).

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