Presented below is information for Sarasota Company. 1. Beginning-of-the-year Accounts Receivable balance was $21.400. 2. Net sales (all on account) for the year were $103.800. Sarasota does not offer cash discounts. Collections on accounts receivable during the year were $84,800. 3. Sarasota is planning to factor some accounts receivable at the end of the year. Accounts totaling $12.800 will be transferred to Credit Factors, Inc. with recourse. Credit Factors will retain 6% of the balances for probable adjustments and assesses a finance charge of 5% The fair value of the recourse obligation is $1,101. (a) Your answer is partially correct.

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by t…

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable ari…