February 1, 2020 Kaw Tan Company casually factored receivables with a carrying value of P500,000 to Kring Krong. Kring Krong assessed 3% of the total receivables as finance charge and retains 5% of the uncollected factored accounts for any adjustment and returns in any excess. Kaw Tan has always maintained a 10% allowance for doubtful accounts. Cash proceeds of Kaw Tan from factoring was P400,000. By the end of February 2020, half of the factored accounts were collected. In March 2020, customers returned goods costing P50,000 and it is the policy of Kaw Tan to maintain 20% gross profit on cost. Customers owing P60,000 paid within the discount period and relevant term was 2/30, n/45. By the end of March 2020, all factored receivables were collected. Prepare the journal entries in the book
February 1, 2020 Kaw Tan Company casually factored receivables with a carrying value of P500,000 to Kring Krong. Kring Krong assessed 3% of the total receivables as finance charge and retains 5% of the uncollected factored accounts for any adjustment and returns in any excess. Kaw Tan has always maintained a 10% allowance for doubtful accounts. Cash proceeds of Kaw Tan from factoring was P400,000. By the end of February 2020, half of the factored accounts were collected. In March 2020, customers returned goods costing P50,000 and it is the policy of Kaw Tan to maintain 20% gross profit on cost. Customers owing P60,000 paid within the discount period and relevant term was 2/30, n/45. By the end of March 2020, all factored receivables were collected. Prepare the journal entries in the book
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 15P: Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed...
Related questions
Question
100%
Problem 3
On February 1, 2020 Kaw Tan Company casually factored receivables with a carrying value of
P500,000 to Kring Krong. Kring Krong assessed 3% of the total receivables as finance charge
and retains 5% of the uncollected factored accounts for any adjustment and returns in any excess.
Kaw Tan has always maintained a 10% allowance for doubtful accounts. Cash proceeds of Kaw
Tan from factoring was P400,000. By the end of February 2020, half of the factored accounts
were collected. In March 2020, customers returned goods costing P50,000 and it is the policy of
Kaw Tan to maintain 20% gross profit on cost. Customers owing P60,000 paid within the discount
period and relevant term was 2/30, n/45. By the end of March 2020, all factored receivables were
collected. Prepare the
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781285867977
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Fundamentals of Financial Management, Concise Edi…
Finance
ISBN:
9781285065137
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781285867977
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Fundamentals of Financial Management, Concise Edi…
Finance
ISBN:
9781285065137
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Fundamentals of Financial Management, Concise Edi…
Finance
ISBN:
9781305635937
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning