The following information is related to ABC Co.: 1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. 2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. Required: Prepare all necessary entries in general journal form for ABC Co.

The following information is related to ABC Co.: 1. Accounts receivable of €60,000 (gross) are factored with BFO Credit without guarantee at a financing charge of 9%. Cash is received for the proceeds; collections are handled by the finance company. 2. Specific accounts receivable of €45,000 (gross) are pledged to ADORO Credit. as security for a loan of €30,000 at a finance charge of 6% of the amount of the loan. The finance company will make the collections. Required: Prepare all necessary entries in general journal form for ABC Co.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 4PB: Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts...

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Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Pepper, Inc. had the following receivable financing transactions in 2021:a) At the beginning of November, Pepper, Inc. assigned P2,000,000 out of its P10,000,000 outstanding accounts receivables to Metrobank in consideration of a P1,500,000, 12% loan. Metrobank charged the company 5% of the loan principal as service charge. By the end of November, Pepper collected P600,000 cash from the assigned accounts net of a P50,000 sales discount. Also, by the end of November, Pepper accepted from customers merchandise originally invoiced at P60,000 as returns.By the end of December, Pepper collected another P700,000 from the assigned accounts after P40,000 sales discount. The company wrote-off P80,000 of the assigned accounts as worthless.The agreement with Metrobank calls for monthly remittance of customer collections for the month. The collections will cover both interest and loan principal.b) Also, at the beginning of November, Pepper, Inc. factored another P500,000 of its accounts…
Maxwell Corporation factored, with recourse, $200,000 of accounts receivable with Huskie Financing. The finance charge is 3%, and 5% was retained to cover sales discounts, sales returns, and sales allowances. Maxwell estimates the recourse obligation at $4,800. What amount should Maxwell report as a loss on sale of receivables?
Adobo Company assigned P 4,000,000 of accounts receivables as collateral for a P1,500,000 5% loan with a bank. The entity was also assessed by the bank a finance charge of 6% on the transaction and is paid up front. What amount should be recorded as a gain or loss on the transfer of accounts receivables?
On May 1, Beach, Inc. Factored $700,000 of accounts receivable with Ever Finance on a with recourse basis instead. The recourse provision has a fair value of $20,000. Under the arrangement, Beach was to handle disputes concerning service and Ever Finance was to make the collections, handle the sales discounts, and absorb the credit losses. Ever Finance assessed a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 4% of the total receivables to cover sales discounts. How much is the cash proceeds from factoring Beach should record on May 1?
Vaughn Manufacturing assigns $7300000 of its accounts receivables as collateral for a $2.64 million 9% loan with a bank. Vaughn Manufacturing also pays a finance fee of 2% on the transaction upfront. What would be recorded as a gain (loss) on the transfer of receivables?
Moon Company assigned P1,500,000 of accounts receivable as collateral for a P1,000,000 loan with a bank. The bank assessed a 4% finance fee and charged interest on the note at 6% at maturity. What would be the journal entry to record the transaction?
On 31st August 2021, Rossy Enterprise had a RM155,000 debit balance in Accounts Receivable and a RM6,200 credit balance in Allowance for Doubtful debt. During September 2021, Rossy made the following transactions:Sept 1 : Sales on account, RM590,000.Sept 10: Collection from receivables through online banking, RM627,000.Sept 20: Write-offs of uncollectible receivables, RM7,000.Sept 30: Bad debt was estimated at 3% of the month’s credit sales.Required:1) Journalize all September transactions using the allowance method. Post the entries to Accounts Receivable, Allowance for Doubtful Debt, and Bad Debt Expense. You need to balance off the ledgers and show their balances on 30th September 2021.2) Show the amount of net accounts receivable would Rossy report in its statement of financial position as at 30 September 2021. Is the amount being realistic? Give your reason.
LOL Company assigned P 4,000,000 of accounts receivables as collateral for a P1,500,000 5%loan with a bank. The entity was also assessed by the bank a finance charge of 6% on thetransaction and is paid up front. What amount should be recorded as a gain or loss on thetransfer of accounts receivables? A. PO B. P240,000 loss C. P100.000 gain D. P150,000 gain
Aunt May, Inc. had the following receivable financing transactions for the fiscal year ended August 31, 2021:a) On June 30, 2021, Aunt May, Inc. had an outstanding accounts receivable balance amounting to P4,000,000. The receivables were pledged to Philippine Savings Bank (PS Bank) in consideration of a 12% loan. The loan amount is 80% of the outstanding receivables. PS Bank charged the company 5% on the outstanding accounts receivable as service charge.By the end of July, Aunt May collected P1,200,000 cash from the accounts receivable net of a P120,000 sales discount. Also, by the end of July, Aunt May accepted from customers merchandise originally invoiced at P80,000 as returns.By the end of August, Aunt May collected another P900,000 after a P50,000 sales discount. The company wrote-off P200,000 of the accounts receivable as worthless.It was agreed-upon with PS Bank that remittances from collections will be made to the bank on a monthly basis and that the collections from customer…
From the details given below, find out the credit sales and total sales.Opening debtors ....................45,000Closing debtors...................... 56,000Discount allowed................... 2,500Sales returns........................... 8,500Irrecoverable amount............ 4,000Bills receivables received..... 12,000Bills receivable dishonoured..... 3,000Cheque dishonoured............ 7,700Cash sales......................... 80,000Cash received from debtors....................... .2,30,000Cheque received from debtors........................ 25,000
CPA Co. assigned P500,000 of accounts receivable to IntAcc1 Finance Co. as security for a loan of P420,000. IntAcc1 charged a 2% commission on the amount of the loan; the interest rate on the note was 10%. During the first month, CPA collected P110,000 on assigned accounts after deducting P380 of discounts. CPA accepted returns worth P1,350 and wrote off assigned accounts totaling P3,700. The amount of cash CPA received from IntAcc1 at the time of the transfer was