Sale of receivables to a factor Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity. To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 1

Question

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 2

Question

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Expert Solution & Answer

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Answer 3

Question

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 4

Question

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

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Answer 5

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Answer 6

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Answer 7

Chapter 8, Problem 8.14E

To determine

Sale of receivables to a factor

Receivables can be liquidated by selling the receivables to a factor, such as financial institutions or bankers, by losing some percentage of receivables as fees (Service charge expense) before its maturity period. Factors will collect cash on receivables directly from the respective customers at its maturity.

To describe: The reason behind the sale of receivables to factors, by Incorporation D.

Answer 8

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Answer 11

Ch. 8 - What is the difference between an account...Ch. 8 - What are some common types of receivables other...Ch. 8 - What are the essential features of the allowance...Ch. 8 - Prob. 4Q Ch. 8 - Prob. 5Q Ch. 8 - 6. What types of receivables does Tootsie Roll...Ch. 8 - Prob. 7Q Ch. 8 - Prob. 8Q Ch. 8 - Prob. 20Q Ch. 8 - Prob. 21Q

Solution Summary: The author explains that Incorporation D sells its receivables to factors to improve its financial ratios, accelerate cash receipts when necessary, or avoid the collection process.

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