Intermediate Accounting (2nd Edition)
2nd Edition
ISBN: 9780134730370
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 9, Problem 9.4MC
Stanberry Company sold $500,000 of net
The
| a. | Cash | 500,000 | |
| Accounts Receivable (net) | 500,000 | ||
| b. | Cash | 450,000 | |
| Loss on Sale of Accounts Receivable | 50,000 | ||
| Accounts Receivable (net) | 500,000 | ||
| c. | Cash | 450,000 | |
| Unrealized Loss on Sale of Accounts Receivable | 50,000 | ||
| Accounts Receivable (net) | 500,000 | ||
| d. | Cash | 450,000 | |
| Due from Cork Company | 50,000 | ||
| Accounts Receivable (net) | 500,000 |
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ABE Company factored P100,000 of its accounts receivable to Cee Company for P85,000. An allowance for bad debts equal to P3,000 was previously established for the account factored. Cee Company withheld 5% of the purchase price as protection against sales returns and allowance.
Determine the following assuming sale of receivable is without recourse or guarantee.
1. Cash received
2. Cost of factoring
Company sold accounts receivable without recourse for 6,100,000. The entity received 4,000,000 cash immediately from the factor. The remaining 275,000 will be received once the factor verifies that none of the account receivable is in dispute. The accounts receivable had a face amount of 5,200,000. The entity had previously established an allowance for bad debts of 230,000 in connection with such accounts.
What amount of loss on factoring should be recognized?
A. 925,000
b. 295,000
c. 695,000
d. 965,000
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Chapter 9 Solutions
Intermediate Accounting (2nd Edition)
Ch. 9 - Prob. 9.1QCh. 9 - Do companies always classify cash as a current...Ch. 9 - Prob. 9.3QCh. 9 - Do accountants typically measure accounts...Ch. 9 - Under the allowance method, will the actual...Ch. 9 - How does an entity record a subsequent recovery of...Ch. 9 - Does the aging of accounts receivable method of...Ch. 9 - What is the difference between pledging accounts...Ch. 9 - How do companies account for receivables that are...Ch. 9 - Is the face value of a note receivable exchanged...
Ch. 9 - What do firms use to record the sales value of a...Ch. 9 - Explain why a company must have highly effective...Ch. 9 - The following are held by YRT Corporation at...Ch. 9 - Fernandez Company had an accounts receivable...Ch. 9 - On its December 31, Year 2, balance sheet, Red...Ch. 9 - Stanberry Company sold 500,000 of net accounts...Ch. 9 - On November 30, Year 1, Derin Corporation agreed...Ch. 9 - Which of the following disclosures about accounts...Ch. 9 - Prob. 9.1BECh. 9 - Prob. 9.2BECh. 9 - Prob. 9.3BECh. 9 - Prob. 9.4BECh. 9 - Prob. 9.5BECh. 9 - Sales Discounts, Most-Likely-Amount Method. On...Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Write-Off....Ch. 9 - Allowance for Uncollectible Accounts, Recovery....Ch. 9 - Bad Debt Expense, Journal Entry. Paul Anchor...Ch. 9 - Bad Debt Expense. Journal Entry. Paul Anchor,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.14BECh. 9 - Prob. 9.15BECh. 9 - Assigned Receivables. Using the information...Ch. 9 - Factoring Receivables without Recourse. Nicks...Ch. 9 - Prob. 9.18BECh. 9 - Notes Receivable. Welk Associates sold a piece of...Ch. 9 - Prob. 9.20BECh. 9 - Prob. 9.21BECh. 9 - Prob. 9.22BECh. 9 - Internal Controls. Identify whether the following...Ch. 9 - Prob. 9.24BECh. 9 - Prob. 9.25BECh. 9 - Prob. 9.26BECh. 9 - Prob. 9.27BECh. 9 - Prob. 9.28BECh. 9 - Prob. 9.1ECh. 9 - Volume Discounts, Sales Discounts. Sodesta Company...Ch. 9 - Allowance for Uncollectible Accounts, Journal...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Bad Debt Expense, Write-Offs, Journal Entry....Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Bad Debt Expense, Percentage of Accounts...Ch. 9 - Prob. 9.9ECh. 9 - Assigning Receivables, Factoring Receivables....Ch. 9 - Prob. 9.11ECh. 9 - Factoring Receivables with and without Recourse....Ch. 9 - Factoring Receivables without Recourse, Factoring...Ch. 9 - Prob. 9.14ECh. 9 - Prob. 9.15ECh. 9 - Notes Receivable with Year-End Interest Accrual,...Ch. 9 - Prob. 9.18ECh. 9 - Allowance for Uncollectible Accounts, Journal...Ch. 9 - Prob. 9.2PCh. 9 - Allowance for Uncollectible Accounts, Aging of...Ch. 9 - Prob. 9.4PCh. 9 - Bad Debt Expense, Aging of Accounts Receivable....Ch. 9 - Bad Debt Expense, Aging of Accounts Receivable,...Ch. 9 - Prob. 9.7PCh. 9 - Prob. 9.8PCh. 9 - Aging of Accounts Receivable, Write-Offs,...Ch. 9 - Disclosure. Using the transactions listed in P9-9,...Ch. 9 - Accounts Receivable Disclosure. Using Kellogg...Ch. 9 - Prob. 1JCCh. 9 - Financial Statement Analysis Case: Revlon The...Ch. 9 - Prob. 1SSCCh. 9 - Surfing the Standards Case 2: Costs Associated...Ch. 9 - Prob. 1BCC
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- 48. Queen Company began the current year with accounts receivable of P1,000,000 and allowance for doubtful accounts of P80,000. During the current year, the following events occurred: Accounts written off 120,000 500,000 3,000,000 Cash Sale Sales on account Doubtful account expense recognized At the end of the current year, the entity showed a balance in accounts receivable of P1,680,000. 200,000 Under cash basis, what amount should be reported as sales? а. 2,700,000 b. 2,200,000 с. 3,500,000 d. 3,320,000arrow_forwardXYZ Services sells (without recourse) $100,000 of receivables to a bank on 2/1/20. The bank retains 3% of the receivables and they charge a fee equal to 2% of the receivables. What effect (if any) does the sale on 2/1/20 have on the assets, liabilities, and equity of the bank that purchases the receivablesarrow_forwardWhat is the loss on factoring to be recorded by Rosewell Company? Prepare the journal entry to record the factoring.arrow_forward
- 39. Haru Company sold accounts receivable without recourse for P10, 600,000. Mild company received P10, 000,000 cash immediately from the factor. The remaining P600, 000 will be received once the factor verifies that none of the accounts receivable is in dispute. The accounts receivable had a face amount of P12, 000,000. Mild company had previously established an allowance for bad debts of P500, 000 in connection with these accounts. How much is the loss on factoring?arrow_forwardDon't give answer in image formatarrow_forwardDelta Company sold goods to wholesalers on terms 2/15, n/30. The entity had no cash sales but 50% of the customers took advantage of the discount. The entity used the gross method of recording sales and accounts receivable. An analysis of the trade accounts receivable at year-end revealed the following: Age (No. of Days) Amount Collectible 0-15 2,000,000 100% 16-30 1,400,000 95% 31-60 400,000 90% Over 60 200,000 50% What is the net realizable value of accounts receivable at year-end?arrow_forward
- Mazda Company sold P5,800,000 in accounts receivable for cash of P5,000,000. The factor withheld 10% of the cash proceeds to allow for possible customer returns and other adjustments. An allowance for bad debts of P600,000 had previously been established by Mazda in relation to these accounts. What was the loss on factoring recognized by Mazda Company?arrow_forwardPlease do not give image formatarrow_forwardOn December 31 of the current year, the following accounts were discovered in the BT21 Company's ledger: Dr. Accounts Receivable is at P356,800; Cr. Bad Debt Allowance is for P8,760; Cr. Cash Sales is worth P913,800; and Cr. Credit Sales is worth P1,851,000. Five percent of the outstanding accounts receivable, according to analysis, won't be recovered. What amount of the allowance for bad debts will need to be adjusted on December 31?arrow_forward
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Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License