Mountain High Ice Cream Company transferred $77,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $6,700) less a 3% fee (3% of the total factored amount). Required: Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list View journal entry worksheet No 1 Event 1 Cash Receivable from factor Accounts receivable General Journal Debit 77,000 6,700 Credit 6,700 77,000 X
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- 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)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 Highthe retained amount (which Mountain estimates has a fair value of $5,000). Mountain High anticipates a $3,000recourse obligation. The bank charges a 2% fee (2% of $60,000), and requires that amount to be paid at the startof 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.Logitech Corporation transferred $100,000 of accounts receivable to a local bank. The transfer was made without recourse. The local bank remits 85% of the factored amount to Logitech and retains the remaining 15%. When the bank collects the receivables, it will remit to Logitech the retained amount less a fee equal to 3% of the total amount factored. Logitech estimates a fair value of its 15% interest in the receivables of $11,000 (not including the 3% fee). What is the effect of this transaction on the company’s assets, liabilities, and income before income taxes?
- Serena Inc. transferred $76,000 of accounts receivable to the Deni Bank. The transfer was made with recourse. Deni remits 89% of the factored amount to Serena and retains 11% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Serena the retained amount (which Serena estimates has a fair value of $6,000). Serena anticipates a $4,000 recourse obligation. The bank charges a 2.5% fee (2.5% of $76,000), and requires that amount to be paid at the start of the factoring arrangement. Instructions: Prepare the journal entry to record the transfer on the books of Serena Inc. assuming that the sale criteria are met.Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. 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) less a 2% fee (2% of the total factored amount).Required:Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)Furman Corporation entered into an assignment agreement with a finance company whereby Furman would be advanced 80% of all accounts assigned, minus a $2,000 service charge. The assignment does not meet the conditions for a sale and should be accounted for as a secured borrowing. During the year, $300,000 of accounts receivable were assigned, $220,000 collections were made on outstanding assigned accounts, and $210,000 was remitted to the finance company. This remittance included interest charges of $2,100. Sales returns and allowances on assigned accounts amounted to $5,000. Required: 1. Prepare the journal entries necessary to record the preceding information. 2. Show how the preceding information would be reported on Furman’s year-end balance sheet (assume the note payable is short-term).
- The controller for Concord Corporation has reached an agreement with Riverbed Financing Ltd. to sell a large portion of Concord’s past-due accounts receivable. Concord agrees to sell $1,840,000 of accounts receivable to Riverbed with recourse. Concord’s controller estimates that the fair value of Concord’s liability to pay Riverbed for uncollectible accounts is $165,000. Riverbed will charge Concord 8% of the total receivables balance as a financing fee, and will withhold an initial amount of 9%.Calculate the net proceeds and the gain or loss on the disposal of receivables to Riverbed Financing Ltd. Net proceeds $ ( Loss / Gain ) on disposal of receivables $ Prepare the journal entry on the books of Concord Corporation to record the disposal of receivables to Riverbed 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…Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas Finance Company. On April 30, 2021, the company transferred $800,000 of accounts receivable to Milpitas. The transfer was made without recourse. Milpitas remits 90% of the factored amount and retains 10%. When Milpitas collects the receivables, it remits to Samson the retained amount less a 4% fee (4% of the total factored amount). Samson estimates the fair value of the last 10% of its receivables to be $60,000.Required:Prepare the journal entry for Samson Wholesale Beverage for the transfer of accounts receivable on April 30, assuming the sale criteria are met.White Corporation has entered into an agreement to transfer accounts receivable to Murphy Company. Under the terms of this agreement, White receives 80% of the value of all the transferred accounts receivable (to reflect credit risk) and is charged a 1% service charge, which is based upon the dollar amount of transferred receivables. Interest is charged at an annual interest rate of 12% of any outstanding loan balance. The transferred receivables will continue to be collected by White with any cash flows being remitted to Murphy at the end of each month. White is not allowed to transfer the receivables to anyone else. White normally transfers its accounts receivable. The following selected 2019 transactions relate to this agreement: Dec 1 Accounts receivable of $160,000 are transferred. 11 A sales return of $1,000 on a transferred account is made. 31 Collections are made on $82,000 of the transferred accounts receivable plus interest for the month of December. This amount is…
- Sakuragi Corporation engaged in the following transactions with regards to financing of receivable during 2021:· On February 1, Sakuragi company factored receivables with a face amount of P300,000 BPI. BPI assessed a factoring fee of 3% of the receivables and retains 5% of the receivables factored. The factoring was done on a without recourse basis, thus transferring all significant risks and rewards related to the receivables to BPI.· On October 1,2021, Sakuragi discounted one year 10% P40,000 interest-bearing notes receivable that will mature on December 31,2021 to Mitsui Bank without recourse. The bank’s discount rate was 15%.· Obtained a P500,000, 6 month, 15% loan from Citibank on November 1, 2021. The company pledge P600,000 of accounts receivable as security for the loan. Sakuragi received the loan less the total interest in advance and a 2% of the loaned amount as service charge.How much is the total cash received from the financing of accounts receivables?…on june 1, 20x9, cap co paid p800,000 for the net assets of sher co. the carrying values for sher's assets and liabilities on june 1, 20x9 follow: cash 150,000 accounts receivable 180,000 capitalized software costs 320,000 goodwill 100,000 liabilities 130,000 on june 1, sher's accounts receivable had a fair value of p40,000, lesser than its carrying amount. additionally, sher's in process research and development was estimated to have a fair value of p200,000. all other items were stated at their fair values. on the june 1, combined balance sheet, how much is reported for goodwill?Samson Wholesale Beverage Company regularly factors its accounts receivable with the Milpitas Finance Company. On April 30, 2024, the company transferred $870,000 of accounts receivable to Milpitas. The transfer was made without recourse. Milpitas remits 85% of the factored amount and retains 15%. When Milpitas collects the receivables, it remits to Samson the retained amount less a 2% fee (2% of the total factored amount). Samson estimates the fair value of the last 15% of its receivables to be $67,000. Required: Prepare the journal entry for Samson Wholesale Beverage for the transfer of accounts receivable on April 30, assuming the sale criteria are met. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.