andhill Woodcrafters sells $648,000 of receivables with a fair value of $661,300 to Sand eets the criteria for a sale. Sandhill Woodcrafters receives full fair value for the receival timating that the fair value of this service liability component is $27,000.
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- The controller for Concord Corporation has reached an agreement with Riverbed Financing Ltd. to sell a large portion of Concord’s past-due accounts receivable. Concord agrees to sell $1,840,000 of accounts receivable to Riverbed with recourse. Concord’s controller estimates that the fair value of Concord’s liability to pay Riverbed for uncollectible accounts is $165,000. Riverbed will charge Concord 8% of the total receivables balance as a financing fee, and will withhold an initial amount of 9%.Calculate the net proceeds and the gain or loss on the disposal of receivables to Riverbed Financing Ltd. Net proceeds $ ( Loss / Gain ) on disposal of receivables $ Prepare the journal entry on the books of Concord Corporation to record the disposal of receivables to Riverbed Financing Ltd. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the…Libby Inc. sold $500,000 of accounts receivable to Reliable Finance on a with recourse basis. Reliable Finance assesses a 4.5% finance charge on the amount of accounts receivable and retains an amount equal to 7% of accounts receivable for possible adjustments. Prepare the journal entries for Libby Incorporated and Reliable Finance to record the sale of the accounts receivable to Reliable Finance assuming that the recourse liability has a fair value of $16,000.The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10% (a) Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd. Net proceeds ✓on disposal of receivables S $
- Wood Incorporated factored $150,000 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood to record the sale, assuming that the recourse liability has a fair value of $7,500. (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.)Vaughn Incorporated sold $166,000 of accounts receivable to Gannon Factors Inc. on a with recourse basis. Gannon assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entries for Vaughn Incorporated and Gannon Factors to record the sale of the accounts receivable to Gannon assuming that the recourse liability has a fair value of $9,100. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Vaughn Incorporated Gannon FactorsThe controller for Ayayai Corporation has reached an agreement with Whispering Winds Financing Ltd. to sell a large portion of Ayayai's past-due accounts receivable. Ayayai agrees to sell $1,800,000 of accounts receivable to Whispering Winds with recourse. Ayayai's controller estimates that the fair value of Ayayai's liability to pay Whispering Winds for uncollectible accounts is $161,000. Whispering Winds will charge Ayayai 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) Your answer is partially correct. Calculate the net proceeds and the gain or loss on the disposal of receivables to Whispering Winds Financing Ltd. Net proceeds Loss LA LA on disposal of receivables $ 1530000 126000
- Blossom Incorporated sold $200,000 of accounts receivable to Ayayai Factors Inc. on a with recourse basis. Ayayai assesses a 2% finance charge of the balance of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entries for Blossom Incorporated and Ayayai Factors to record the sale of the accounts receivable to Ayayai, assuming that the recourse liability has a fair value of $10,000. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Blossom Incorporated Avayai Factors Inc. Debit LI CreditPearl Woodcrafters sells $227,500 of receivables to Commercial Factors, Inc. on a with recourse basis. Commercial assesses a finance charge of 6% and retains an amount equal to 5% of accounts receivable. Pearl estimates that the recourse liability has a fair value of $4,695 instead of $9,390 estimated earlier. Prepare the journal entry for Pearl to record the sale. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit What are the effects of this change in the value of the recourse liability on Pearl's financial statements? Pearl's income will be * by $ Pearl's will be * by $Daniel Martin and John Duke contracted with J & S Distributors, Inc., to purchase a KIS Magnum Speed printer for $17,000. The parties agreed that Martin and Duke would send one-half of the money as a deposit and would pay the balance upon delivery. They also agreed to the following provision: In the event of non-payment of the balance of the purchase price reflected herein on due date and in the manner recorded or on such extended date which may be caused by late delivery on the part of [the seller], the Customer shall be liable for: (1) immediate payment of the full balance recorded herein; and (2) payment of interest at the rate of 12 percent per annum calculated on the balance due, when due, together with any attorney’s fees, collection charges and other necessary expenses incurred by [the seller]. When the machine arrived five days late, Martin and Duke refused to accept it, stating that the company had purchased a substitute machine elsewhere. Martin and Duke requested the…
- On June 1, 2021, Oriole & Sons sold equipment to James Landscaping Service in exchange for a zero-interest bearing note with a face value of $112800, with payment due in 12 months. The fair value of the equipment on the date of sale was $97200. The amount of revenue to be recognized on this transaction in 2021 is $97200. $112800. $15600. $97200 sales revenue and $9100 interest revenue.Japee, Inc. assigned P240,000 of its receivables to PJTC Finance company. A note payable was executed. The contract provided that PJTC would advance 85% of the gross amount of the receivables. The contract specified recourse and non-notification; therefore, Japee’s debtors continue to remit directly to it; the cash from customers is then remitted to the finance company. The cash remitted is first applied to the finance charges, with the remainder applied to the principal. During the first month, customers owing P164,000 paid cash, less sales returns and allowances of P6,400. The finance charge at the end of the first month was P1,400.How much is the disclosed equity in assigned accounts as of the end of the first month?Morley Manufacturing has notes receivable that have a fair value of P810,000 and a carrying amount of P620,000. Morley decides on December 31, 2021, to use the fair value option for these recently-acquired receivables. Which of the following statements is correct regarding the election of the fair value option by Morley? a. Morley can elect to use the fair value option or amortized cost at each statement of financial position date. b. Morley reports the receivables at fair value, with any unrealized holding gains and losses reported as a separate component of comprehensive income. c. The unrealized holding gain is the difference between the fair value and the carrying amount. d. All of the choices are correct regarding the fair value option.