Finance charge on amount of factored accounts receivable

Assignment Help Financial Accounting

Reference no: EM13777005

On April 1 2015 Smith Inc factored 200,000 of accounts receivable to Cameron Factors Inc on a with recourse basis. Cameron assesses a 2% finance charge on the amount of the factored accounts receivable and retains an amount equal to 6% of the factored accounts receivable for possible adjustments.

1. Prepare the required journal entry for Smith Inc to record the factoring of the accounts receivable assuming that the recourse liability has a fair value of 10,000

2. Alternatively, prepare the required journal entry for Smith Inc to record the factoring of the accounts receivable assuming instead that the factoring took place without recourse.

Reference no: EM13777005

Questions Cloud

Important to understand employees : Why do individuals resist some changes but not others? Why is it important to understand employees' reasons for resistance? How can you ensure communication to these employees?

Rent is recognized as income in the period earned : In 2013, Ryan Management collected rent revenue for 2014 tenant occupancy. For financial reporting, the rent is recognized as income in the period earned, but for income tax reporting it is taxed when collected. The unearned portion of the rent colle..

Marketing communications memo : Select one of the following scenarios, where an organization is creating an integrated marketing communications plan to increase its customer base, as the basis for your memo:

What constitutional issues are involved in the scenario : What constitutional issues are involved in the scenario that dictates what you can and cannot do related to the evidence of other criminal activity outside the scope of the original wiretap order? Explain

Finance charge on amount of factored accounts receivable : On April 1 2015 Smith Inc factored 200,000 of accounts receivable to Cameron Factors Inc on a with recourse basis. Cameron assesses a 2% finance charge on the amount of the factored accounts receivable and retains an amount equal to 6% of the factore..

Marketing research and promotional message : Select one of the following consumer groups: teenagers, Baby Boomers, females, or minorities. Prepare a 700- to 1,050-word paper in which you analyze different facets of your group.

Examine consumer traits and behaviors : Prepare a 2,100- to 2,450-word paper in which you examine consumer traits and behaviors. Address the following:

client-side software requirements of the information system : Replace this Line with the Title of Your Essay Start your introductory paragraph(s) here (i.e., delete all of my paragraphs of instruction after reading through them, and replace them with your own paragraphs for your essay)

Logical fallacies related problem : Based upon your examination, how would you redo the advertisement to make it more truthful? Would this be possible?

User Account

All Pages