Business, 06.04.2021 01:30 omoaye

Mountain High Ice Cream Company transferred $79,000 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 $6,900) 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.

Answers: 1

Show answers

Answers

Debit Cash for $68,730; Debit Receivable from factor for $6,900; Debit Loss on sale of receivables for $3,370; and Credit Accounts receivable $79,000.

Explanation:

Factored amount = $79,000

Cash = Factored amount * (100% - Percentage of he factored amount retained - Rate of fee = $79,000 * (100% - 10% - 3%) = $68,730

Receivable from factor = $6,900

Loss on sale of receivables = Factored amount - Cash - Receivable from factor = $79,000 - $68,730 - $6,900 = $3,370

The journal entry will therefore look as follows:

Details Debit ($) Credit ($)

Cash 68,730

Receivable from factor 6,900

Loss on sale of receivables 3,370

Accounts receivable 79,000

(To record factoring of accounts receivable.)

Answer from: Quest

apex verified answer < 3

: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : doubling a recipe and figuring out how many cups of paint to use are both examples of using math skills : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : :

i really hope this this is the correct answer < 3 < 3 < 3

Answer from: Quest

Maximizing the difference between total revenue and total cost;

Another question on Business

Business, 21.06.2019 21:10

Strawberry plants reproduce by

Answers: 1

Answer

Business, 21.06.2019 23:10

You are the new chief information officer for the video-game developer, necturus games. the company has recently undergone a major expansion of its primary product, and you must staff up the is department and determine the best way to develop new game "capsules" for the game, "escape velocity."

Answers: 1

Answer

Business, 22.06.2019 03:30

In return for their with optimizing his painting project, the castle servant informed poly and digit that he saw someone dressed as the king leaving behind a trail of crumbs as he walked into the jester's room late last night. poly and digit have finally found the crisp-collecting culprit â€” it turns out the jester's shoe size and hair color match the clues that were found! in gratitude, poly and digit agree to the servant with his current task of replacing all of the tables and chairs in the castle. his goal is to determine which furniture company should produce the new furniture. he receives information from a company that customizes elegant furniture, and he wants to analyze the company's production process in order to calculate some problems about cost and availability. read the following scenario, and assist poly and digit as they the servant with his calculations. the fit for a king furniture company requires 2020 hours of labor to produce a standard table, and a chair requires 1212 hours of labor. the labor available is 565565 hours per week. the company can produce at most 3535 chairs per week.

Answers: 1

Answer

Business, 22.06.2019 09:30

What is the relationship among market segmentation, target markts, and consumer profiles?

Answers: 2

Answer

You know the right answer?

Mountain High Ice Cream Company transferred $79,000 of accounts receivable to the Prudential Bank. T...

Questions