FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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**Windsor, Inc. Financial Overview for 2017**

1. **Beginning-of-the-Year Accounts Receivable Balance**
   - The initial accounts receivable balance was $173,000.

2. **Net Sales for the Year**
   - Total net sales amounted to $1,400,000.
   - Out of these, $150,000 were cash sales.
   - Note: Windsor does not provide cash discounts for early payment.

3. **Collections on Accounts Receivable**
   - Throughout the year, collections on accounts receivable totaled $1,202,000.

**Factoring of Accounts Receivable**

- Windsor plans to factor accounts receivable totaling $60,000 by year-end.
- These accounts will be transferred to Herzog Factors, Inc. with recourse.
- Herzog Factors will retain 3% of the balances for potential adjustments.
- A finance charge of 5% is applied.
- The fair value of the recourse obligation stands at $1,600.
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Transcribed Image Text:**Windsor, Inc. Financial Overview for 2017** 1. **Beginning-of-the-Year Accounts Receivable Balance** - The initial accounts receivable balance was $173,000. 2. **Net Sales for the Year** - Total net sales amounted to $1,400,000. - Out of these, $150,000 were cash sales. - Note: Windsor does not provide cash discounts for early payment. 3. **Collections on Accounts Receivable** - Throughout the year, collections on accounts receivable totaled $1,202,000. **Factoring of Accounts Receivable** - Windsor plans to factor accounts receivable totaling $60,000 by year-end. - These accounts will be transferred to Herzog Factors, Inc. with recourse. - Herzog Factors will retain 3% of the balances for potential adjustments. - A finance charge of 5% is applied. - The fair value of the recourse obligation stands at $1,600.
**Journal Entry Preparation: Recording the Sale of Receivables**

- **Instructions:**
  - Prepare the journal entry to record the sale of the receivables.
  - 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 0 for the amounts.

**Journal Entry Table:**

| Account Titles and Explanation | Debit | Credit |
|--------------------------------|-------|--------|
|                                |       |        |
|                                |       |        |
|                                |       |        |
|                                |       |        |
|                                |       |        |
|                                |       |        |

Please fill in the appropriate account titles and corresponding debit and credit amounts according to your specific transaction details.
expand button
Transcribed Image Text:**Journal Entry Preparation: Recording the Sale of Receivables** - **Instructions:** - Prepare the journal entry to record the sale of the receivables. - 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 0 for the amounts. **Journal Entry Table:** | Account Titles and Explanation | Debit | Credit | |--------------------------------|-------|--------| | | | | | | | | | | | | | | | | | | | | | | | | Please fill in the appropriate account titles and corresponding debit and credit amounts according to your specific transaction details.
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