Question: Presented below is the information for Skysong Company. Beginning of the year Accounts Receivable balance was $23600. Net sales (all on account) for the year were $103100. Skysong does not offer cash discounts. Collections on accounts receivable during the year were $90300. Skysong is planning to factor some accounts receivables at the end of the year. Accounts totaling $14100 will be transfered to Credit Factors, Inc with recourse. Credit Factor will retain 7% of the balances for probable adjustments and assesses a finance charge of 6%. The fair value of the recourse obligation is $1021. Prepare the journal entry to record the sale of the receivables. Compute Skysongs accounts receivable turnover for the year, assuming the receivables are sold.
Question: Presented below is the information for Skysong Company. Beginning of the year Accounts Receivable balance was $23600. Net sales (all on account) for the year were $103100. Skysong does not offer cash discounts. Collections on accounts receivable during the year were $90300. Skysong is planning to factor some accounts receivables at the end of the year. Accounts totaling $14100 will be transfered to Credit Factors, Inc with recourse. Credit Factor will retain 7% of the balances for probable adjustments and assesses a finance charge of 6%. The fair value of the recourse obligation is $1021. Prepare the journal entry to record the sale of the receivables. Compute Skysongs accounts receivable turnover for the year, assuming the receivables are sold.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Presented below is the information for Skysong Company.
Beginning of the year Accounts Receivable balance was $23600.
Net sales (all on account) for the year were $103100. Skysong does not offer cash discounts.
Collections on accounts receivable during the year were $90300.
Skysong is planning to factor some accounts receivables at the end of the year. Accounts totaling $14100 will be transfered to
Credit Factors, Inc with recourse. Credit Factor will retain 7% of the balances for probable adjustments and assesses a finance
charge of 6%. The fair value of the recourse obligation is $1021.
Prepare the journal entry to record the sale of the receivables.
Compute Skysongs accounts receivable turnover for the year, assuming the receivables are sold.
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