Mountain high ice cream company transferred 60000 of

Reference no: EM13605212

Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,000). Mountain High anticipates a $3,000 recourse obligation. The bank charges a 2% fee (2% of $60,000), and requires that amount to be paid at the start of the factoring arrangement.

Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.

Cash ____________

Loss on sales of receivables ____

Receivable from factor _______

Recourse Liability ____________

Accounts receivable _________

Reference no: EM13605212

Questions Cloud

Johnson corporation bought a new machine and agreed to pay : johnson corporation bought a new machine and agreed to pay for it in equal annual installments of 6000 at the end of

Managers should base pricing decisions on both cost and : review the following statements and write 3-4 paragraphs that provide support for your answers1.managers should base

Matisyahus sales journal for january shows a total of : selected account balances for matisyahu company at january 1 2010 are presented below.accounts payable 13696accounts

Discuss a situation you have observed in your employment : discuss a situation you have observed in your employment read about online or heard on the news that involved a

Mountain high ice cream company transferred 60000 of : mountain high ice cream company transferred 60000 of accounts receivable to the prudential bank. the transfer was made

Finished goods inventory at the end of september was 3000 : 1.toscano company makes all its sales on account. accounts receivable payment experience is as followspercent paid in

July 31 the balance of the unearned revenue account relates : july 31 the balance of the unearned revenue account relates to the contract between ps music and whbd described in the

Kordel inc acquired 75 of the outstanding common stock of : kordel inc. acquired 75 of the outstanding common stock of raxston corp. raxston currently owes kordel 500000 for

It sold land haveing a fair market value of 900000 in : on july 1 2010 rentoul inc made two sales1. it sold land haveing a fair market value of 900000 in exchange for a 4-year

User Account

All Pages