Martinez Incorporated factored $139,200 of accounts receivable with Sandhill Factors Inc. on a without-recourse basis. Sandhill assesses a 3% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments. Prepare the journal entry for Martinez Incorporated and Sandhill Factors to record the factoring of the accounts receivable to Sandhill. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually) No. Account Titles and Explanation Martinez 1. 2. Sandhill Debit Credit

Martinez Incorporated factored $139,200 of accounts receivable with Sandhill Factors Inc. on a without-recourse basis. Sandhill assesses a 3% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments. Prepare the journal entry for Martinez Incorporated and Sandhill Factors to record the factoring of the accounts receivable to Sandhill. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually) No. Account Titles and Explanation Martinez 1. 2. Sandhill Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On January 1, Amil Corp. lent $37,000 to Windsor Ltd., accepting Windsor's $49,247, three-year, zero-interest-bearing note. The implied interest is 10%.(a) Prepare Amil's journal entries for the initial transaction, recognition of interest each year assuming use of the effective interest method, and the collection of $49,247 at maturity. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit (To record initial transaction) (To record interest income in the first year) (To record interest income in the second year) (To record interest income in the third year) (To record collection at maturity)
Whispering Incorporated factored $126,900 of accounts receivable with Metlock Factors Inc. on a without-recourse basis. Metlock assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments. Prepare the journal entry for Whispering Incorporated and Metlock Factors to record the factoring of the accounts receivable to Metlock. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Analysis of accounts receivable reveals that with two exceptions, all appeared collectible as at December 31, 2021. These are: a.) The Bravo Company had fallen into receivership and were expected to realize only seventy centavos on a peso. The December 31, 2021 receivable balance was P227,000. On January 29, 2022, you verified that P200,000 was already collected from Bravo Company. Required: adjusting entries
On December 1, 2020, RB Company assigned on a non-notification basis accounts receivable of Php6,000,000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity signed a note for the bank loan. On December 31, 2020, the entity collected assigned accounts of Php2,000,000 less discount of Php200,000. The entity remitted the collections to the Lbank in partial paytment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. The entity accepted sales returns of Php100,000 on the assigned accounts and wrote off assigned accounts totaling Php300,000. What is the balance of accounts receivable assigned on December 31, 2020?
At the beginning of 2021, Brad’s Heating & Air (BHA) has a balance of $26,000 in accounts receivable. Because BHA is a privately owned company, the company has used only the direct write-off method to account for uncollectible accounts. However, at the end of 2021, BHA wishes to obtain a loan at the local bank, which requires the preparation of proper financial statements. This means that BHA now will need to use the allowance method. The following transactions occur during 2021 and 2022.1. During 2021, install air conditioning systems on account, $190,000.2. During 2021, collect $185,000 from customers on account.3. At the end of 2021, estimate that uncollectible accounts total 15% of ending accounts receivable.4. In 2022, customers’ accounts totaling $8,000 are written off as uncollectible.Required:1. Record each transaction using the allowance method.2. Record each transaction using the direct write-off method.3. Calculate the difference in net income (before taxes) in 2021 and…
The ledger of Teal Mountain Inc. at the end of the current year shows Accounts Receivable $74,000; Credit Sales $810,000; and Sales Returns and Allowances $36,000. If Teal Mountain uses the direct write-off method to account for uncollectible accounts, journalize the entry if on December 31 Teal Mountain determines that Matisse Company's $750 balance is uncollectible. (a) If Allowance for Doubtful Accounts has a credit balance of $1,400 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 11% of accounts receivable. (b) If Allowance for Doubtful Accounts has a debit balance of $600 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 9% of accounts receivable. (c) Prepare journal entries to record the above transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit (a) Dec.…
From inception of operations to December 31, 2020, Flounder Corporation provided for uncollectible accounts receivable under the allowance method. The provisions are recorded, based on analyses of customers with different risk characteristics. Bad debts written off were charged to the allowance account; recoveries of bad debts previously written off were credited to the allowance account, and no-year-end adjustments to the allowance account were made. Flounder’s usual credit terms are n/30 days. The balance in allowance for doubtful accounts was $119,600 (cr.) on January 1, 2020. During 2020, credit sales totaled $8,280,000, the provision for doubtful accounts was determined to be $165,600, $82,800 of bad debts were written off, and recoveries of accounts previously written off amounted to $13,800. Flounder installed a computer system in November 2020, and an aging of accounts receivable was prepared for the first time as of December 31, 2020. A summary of aging is as follows:…
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Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $10,000 of its accounts receivable from Leer Company. March 29 Leer Company unexpectedly pays its account in full to Dexter Company. Dexter records its recovery of this bad debt. Prepare journal entries to record the above transactions. View transaction list Journal entry worksheet 1 2 3 Record write-off of Leer Company account. Note: Enter debits before credits. Date March 11 General Journal Debit Credit Record entry Clear entry View general journal >
On March 1, 2019, Seymour Inc assigns its accounts receivable of 300,000 to Minnesota financing company with recourse. Minnesota financing company, the factor, charges a 4% fee and retains 10% for future returns and allowances. The recourse obligation is estimated by Seymour to be $21,000. On March 1, 2019, there was already an allowance for bad debts relating to these receivables of 15,000 (credit) in Seymour's books. (hint: Seymour must remove the allowance as part of the sale of its receivables, which results in a reduced loss on the sale of receivables.) provide 1.)Seymour's journal entry: 2.) assume during march Minnesota financing company is able to collect 273,000 and notifies Seymour of 5,000 of returns, 2,000 of sales discounts, and 22,000 of uncollectible accounts. provide the appropriate journal entry for Seymour to reflect these events. (hint: additional loss)
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Solstice Company, which uses the direct write-off method, determines on October 1 that it cannot collect $61,000 of its accounts receivable from its customer, P. Moore. On October 30, P. Moore unexpectedly pays his account in full to Solstice Company. Record Solstice's entries for recovery of this bad debt. View transaction list Journal entry worksheet Debit Credit >