10th Edition

ISBN: 9781307660630

Author: SPICELAND

Publisher: MCG CUSTOM

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Textbook Question

Chapter 7, Problem 7.24E

Factoring of accounts receivable with recourse

• LO7–8

[This is a variation of E 7–19 modified to focus on factoring with recourse.]

Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,000). Mountain High anticipates a $3,000 recourse obligation. The bank charges a 2% fee (2% of $60,000), and requires that amount to be paid at the start of the factoring arrangement.

Required:

Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.

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Chapter 7, Problem 7.23E

Chapter 7, Problem 7.25E

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Chapter 7 Solutions

INTERMEDIATE ACCOUNTING (ACCT 3200A)

Ch. 7 - Prob. 7.1Q Ch. 7 - Prob. 7.2Q Ch. 7 - Prob. 7.3Q Ch. 7 - Prob. 7.4Q Ch. 7 - Prob. 7.5Q Ch. 7 - Prob. 7.6Q Ch. 7 - Prob. 7.7Q Ch. 7 - Distinguish between the gross and net methods of...Ch. 7 - Briefly explain the accounting treatment for sales...Ch. 7 - Explain the typical way companies account for...

Ch. 7 - Prob. 7.11Q Ch. 7 - Prob. 7.12Q Ch. 7 - Briefly explain the difference between the income...Ch. 7 - Prob. 7.14Q Ch. 7 - Is any special accounting treatment required for...Ch. 7 - Explain any possible differences between...Ch. 7 - Prob. 7.17Q Ch. 7 - What is meant by the discounting of a note...Ch. 7 - What are the key variables that influence a...Ch. 7 - Prob. 7.20Q Ch. 7 - Prob. 7.21Q Ch. 7 - (Based on Appendix 7B) Marshall Companies, Inc.,...Ch. 7 - Prob. 7.1BE Ch. 7 - Prob. 7.2BE Ch. 7 - Prob. 7.3BE Ch. 7 - Prob. 7.8BE Ch. 7 - Prob. 7.9BE Ch. 7 - Prob. 7.10BE Ch. 7 - Prob. 7.11BE Ch. 7 - Prob. 7.12BE Ch. 7 - Prob. 7.13BE Ch. 7 - Uncollectible accounts; balance sheet approach ...Ch. 7 - Uncollectible accounts; solving for unknown LO75,...Ch. 7 - Prob. 7.16BE Ch. 7 - Note receivable LO77 On December 1, 2018,...Ch. 7 - Long-term notes receivable LO74 On April 19,...Ch. 7 - Prob. 7.19BE Ch. 7 - Factoring of accounts receivable LO78 Refer to...Ch. 7 - Prob. 7.21BE Ch. 7 - Discounting a note LO78 On March 31, Dower...Ch. 7 - Receivables turnover LO78 Camden Hardwares credit...Ch. 7 - Prob. 7.24BE Ch. 7 - Prob. 7.25BE Ch. 7 - Prob. 7.26BE Ch. 7 - Prob. 7.3E Ch. 7 - Prob. 7.4E Ch. 7 - Prob. 7.9E Ch. 7 - Prob. 7.10E Ch. 7 - Prob. 7.12E Ch. 7 - Prob. 7.13E Ch. 7 - Prob. 7.14E Ch. 7 - Prob. 7.17E Ch. 7 - Prob. 7.23E Ch. 7 - Factoring of accounts receivable with recourse ...Ch. 7 - Factoring of accounts receivable with recourse...Ch. 7 - Concepts; terminology LO71 through LO78 Listed...Ch. 7 - Prob. 7.29E Ch. 7 - Prob. 7.36E Ch. 7 - Prob. 7.1P Ch. 7 - Prob. 7.2P Ch. 7 - Prob. 7.3P Ch. 7 - Prob. 7.5P Ch. 7 - Prob. 7.1DMP Ch. 7 - Real World Case 74 Sales returns; Green Mountain...Ch. 7 - Ethics Case 75 Uncollectible accounts LO75 You...Ch. 7 - Prob. 7.5DMP Ch. 7 - Prob. 7.6DMP Ch. 7 - Prob. 7.9DMP

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