Your answer is partially correct. Try again. 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 $2,145,000 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 $176,000. Sheffield will charge Bramble 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. Calculate the net proceeds and the gain or loss on the sale of receivables to Sheffield Financing Ltd. Net proceeds Loss on sale of receivables Prepare the journal entry on the books of Bramble Corporation to record the sale of receivables to Sheffield Financing Ltd. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Due from Factor Loss on Sale of Receivables Accounts Receivable Recourse Liability SHOW LIST OF ACCOUNTS 1823250 326150 LINK TO TEXT Debit 1823250 171600 326150 Credit 2145000 176000
Your answer is partially correct. Try again. 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 $2,145,000 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 $176,000. Sheffield will charge Bramble 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. Calculate the net proceeds and the gain or loss on the sale of receivables to Sheffield Financing Ltd. Net proceeds Loss on sale of receivables Prepare the journal entry on the books of Bramble Corporation to record the sale of receivables to Sheffield Financing Ltd. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Due from Factor Loss on Sale of Receivables Accounts Receivable Recourse Liability SHOW LIST OF ACCOUNTS 1823250 326150 LINK TO TEXT Debit 1823250 171600 326150 Credit 2145000 176000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
answer in text form please (without image), Note: .Every entry should have narration please
Transcribed Image Text:Your answer is partially correct. Try again.
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 $2,145,000 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 $176,000. Sheffield will charge Bramble 7% of the total receivables balance as a
financing fee, and will withhold an initial amount of 8%.
Calculate the net proceeds and the gain or loss on the sale of receivables to Sheffield Financing Ltd.
Net proceeds
Loss
on sale of receivables
Account Titles and Explanation
Prepare the journal entry on the books of Bramble Corporation to record the sale of receivables to Sheffield
Financing Ltd. (Credit account titles are automatically indented when amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the
amounts.)
Due from Factor
Loss on Sale of Receivables
Accounts Receivable
E
Recourse Liability
SHOW LIST OF ACCOUNTS
1823250
LINK TO TEXT
326150
Debit
1823250
171600
326150
Credit
2145000
176000
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