The trial balance before adjustment for Flounder Company shows the following balances. Dr. Cr. Accounts Receivable $84,500 Allowance for Doubtful Accounts 2,980 Sales Revenue $457,000 Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) 1. To obtain additional cash, Flounder factors without recourse $27,700 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. 2. To obtain a 1-year loan of $55,400, Flounder pledges $66,900 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. 3. The company wants to maintain the Allowance for Doubtful Accounts at 6% of gross accounts receivable. 4. Based on an aging analysis, an allowance of $5,909 should be reported. Assume the allowance has a credit balance of $1,099.
The trial balance before adjustment for Flounder Company shows the following balances. Dr. Cr. Accounts Receivable $84,500 Allowance for Doubtful Accounts 2,980 Sales Revenue $457,000 Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) 1. To obtain additional cash, Flounder factors without recourse $27,700 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. 2. To obtain a 1-year loan of $55,400, Flounder pledges $66,900 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. 3. The company wants to maintain the Allowance for Doubtful Accounts at 6% of gross accounts receivable. 4. Based on an aging analysis, an allowance of $5,909 should be reported. Assume the allowance has a credit balance of $1,099.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter16: Accounting For Accounts Receivable
Section: Chapter Questions
Problem 9SPB: UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the...
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The
Dr.
|
Cr.
|
|||
Accounts Receivable | $84,500 | |||
Allowance for Doubtful Accounts | 2,980 | |||
Sales Revenue | $457,000 |
Using the data above, give the
1. | To obtain additional cash, Flounder factors without recourse $27,700 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. | |
2. | To obtain a 1-year loan of $55,400, Flounder pledges $66,900 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial. | |
3. | The company wants to maintain the Allowance for Doubtful Accounts at 6% of gross accounts receivable. | |
4. | Based on an aging analysis, an allowance of $5,909 should be reported. Assume the allowance has a credit balance of $1,099. |
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