Vaughn Corp. factors $440,000 of accounts receivable with Bramble Finance Corporation on a without recourse basis on July 1, 2025. The receivables records are transferred to Bramble Finance, which will receive the collections. Bramble Finance assesses a finance charge of 1.90% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. (a) Prepare the journal entry on July 1, 2025, for Vaughn Corp. to record the sale of receivables without recourse. (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. List all debit entries before credit entries.) Date July 1, 2025 Account Titles and Explanation Debit Credit

Vaughn Corp. factors $440,000 of accounts receivable with Bramble Finance Corporation on a without recourse basis on July 1, 2025. The receivables records are transferred to Bramble Finance, which will receive the collections. Bramble Finance assesses a finance charge of 1.90% of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale. (a) Prepare the journal entry on July 1, 2025, for Vaughn Corp. to record the sale of receivables without recourse. (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. List all debit entries before credit entries.) Date July 1, 2025 Account Titles and Explanation Debit Credit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Weldon Corporation's fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2024: March 17 Accounts receivable of $2,600 were written off as uncollectible. The company uses the allowance method. March 30 Loaned an officer of the company $33,000 and received a note requiring principal and interest at 7% to be paid on March 30, 2025. May 30 Discounted the $33,000 note at a local bank. The bank's discount rate is 8 %. The note was discounted without recourse and the sale criteria are met. June 30 Sold merchandise to the Blankenship Company for $21,000. Terms of the sale are 4/10/30 Weldon uses the gross method to account for cash discounts. July 8 The Blankenship Company paid its account in full. August 31 Sold stock in a nonpublic company with a book value of $5,900 and accepted a $6,900 noninterest-bearing note with a discount rate of 8%. The $6,900 payment is due on February 28, 2025. The stock has no ready market value.…
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)
On May, 2020, Manara Company factored receivables of $200,000 to National Company. National Company assesses a finance charge of 4% of the receivables and retains 7% of the receivables. Assume that Manara Company factors the receivables on a without guarantee (without recourse) basis. The loss on sales of receivables to be reported is:
At the end of 2023, Ayayai Corp. has accounts receivable of $2.90 million and an allowance for expected credit losses of $115,000. On January 16, 2024, Ayayai determined that its $22,400 receivable from Blossom Company will not be collected, and management has authorized its write-off. On January 31, 2024, Ayayai received notification that the company will receive $0.15 for every $1.00 of accounts receivable relating to Sunland Company The company had previously written off 100% of the amount due from Sunland ($60,500). (a) Your answer is partially correct. Prepare the journal entry for Ayayai to write-off the Blossom receivable and any journal entry needed to reflect the notice regarding Sunland. (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.) Blossom Company accounts receivable write-off:…
NNN Company factored P5,000,000 of accounts receivable to ABC Company on July 1, 2020. Control was surrendered by NNN. ABC assessed a fee of 5% and retains a holdback equal to 20% of the accounts receivable. In addition ABC charged 12% computed on a weighted average time to maturity of the receivables of 30 days. 33.In the 2020 income statement, what amount should be reported as interest income? 34.In the 2020 income statement, what amount should be reported as gain or loss on sale of equipment?
d
Wood Incorporated factored €150,000 of accounts receivable with Engram Factors Inc., Without guarantee. Engram assesses a 2% finance charge of the amount of accounts receivable Retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood Incorporated and Engram Factors to record the factoring of the accounts receivable to Engram.
Bramble Corp. factors $630,000 of accounts receivable with Marin Inc., Inc. on a with recourse basis. Marin Inc. will collect the receivables. The receivable records are transferred to Marin Inc. on August 15, 2020. Marin Inc. assesses a finance charge of 3.0% of the amount of accounts receivable and also reserves an amount equal to 5.40% of accounts receivable to cover probable adjustments. Bramble prepares financial statements under ASPE. Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2020, for Bramble to record the sale of receivables, assuming the recourse obligation has a fair value of $5,900
Culver Company shows a balance of $237,880 in the Accounts Receivable account on December 31, 2020. The balance consists of the following. Installment accounts due in 2021 $23,900 Installment accounts due after 2021 38,300 Overpayments to vendors 3,540 Due from regular customers, of which $39,570 represents accounts pledged as security for a bank loan 87,500 Advances to employees 1,740 Advance to subsidiary company (due in 2021) 82,900 Illustrate how the information above should be shown on the balance sheet of Culver Company on December 31, 2020. Assume that installment accounts collectible due after December 31, 2018 (Customers) are collectible within the operating cycle of the business. The company’s operating cycle is such that all installment receivables are classified as current. CULVER COMPANYBalance Sheet (Partial)
(Transfer of Receivables without Recourse) JFK Corp. factors $300,000 of accounts receivable with LBJ Finance Corporation on a without recourse basis on July 1, 2017. The receivables records are transferred to LBJ Finance, which will receive the collections. LBJ Finance assesses a finance charge of 1½% of the amount of accounts receivable and retains anamount equal to 4% of accounts receivable to cover sales discounts, returns, and allowances. The transaction is to be recorded as a sale.Instructions(a) Prepare the journal entry on July 1, 2017, for JFK Corp. to record the sale of receivables without recourse.(b) Prepare the journal entry on July 1, 2017, for LBJ Finance Corporation to record the purchase of receivables without recourse.
Vaughn Manufacturing assigns $7300000 of its accounts receivables as collateral for a $2.64 million 9% loan with a bank. Vaughn Manufacturing also pays a finance fee of 2% on the transaction upfront. What would be recorded as a gain (loss) on the transfer of receivables?
On February 1, 2023 MANGOSTEN Company factored receivable with a carrying amount of ₱ 300,000 to ACKEE Company. ACKEE Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, assume MANGOSTEEN factors receivables on a without recourse basis. Using the same information on the previous number, what amount of cash was received? A. ₱ 276,000 B. ₱ 285,000 C. ₱ 291,000 D. ₱ 300,000