Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) To obtain additional cash, Martinez factors without recourse $29,200 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. 1. To obtain a 1-year loan of $57,500, Martinez pledges $71,400 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. 2. 3. The company wants to maintain the Allowance for Doubtful Accounts at 7% of gross accounts receivable. 4. Based on an aging analysis, an allowance of $5,717 should be reported. Assume the allowance has a credit balance of $998.
Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) To obtain additional cash, Martinez factors without recourse $29,200 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. 1. To obtain a 1-year loan of $57,500, Martinez pledges $71,400 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. 2. 3. The company wants to maintain the Allowance for Doubtful Accounts at 7% of gross accounts receivable. 4. Based on an aging analysis, an allowance of $5,717 should be reported. Assume the allowance has a credit balance of $998.
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 9SPA: UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the...
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