Net receivables to cover sales discounts

Assignment Help Accounting Basics

Reference no: EM13154722

On May 1, Dexter, Inc. factored $800,000 of accounts receivable with Quick Finance on a without recourse basis. Under the arrangement, Dexter was to handle disputes concerning service, and Quick Finance was to make the collections, handle the sales discounts, and absorb the credit losses. Quick Finance assessed a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts.

Instructions:

(a) Prepare the journal entry required on Dexter's books on May 1.

(b) Prepare the journal entry required on Quick Finance's books on May 1.

(c) Assume Dexter factors the $800,000 of accounts receivable with Quick Finance on a with recourse basis instead. The recourse provision has a fair value of $14,000. Prepare the journal entry required on Dexter's books on May 1.

Reference no: EM13154722

Questions Cloud

What is the total pressure in mmhg of the mixture : A gas mixture contains helium and oxygen at partial pressures of 255 torr and 0.450 atm.What is the total pressure in mmHg of the mixture after it is placed in a container one-half the volume of the original container? (Temperature remains constan..

You roll 2 dice and consider the sum of the two : Suppose that you roll 2 dice and consider the sum of the two. Let A be the event of throwing odd, B be the event of throwing 4 or less and C be the event of throwing a multiple of 3.a) What is the sample space S and the corresponding probability of e..

Does the diference in response matter : Keeping all elsr constant their answer would likely differ. How do you guess the interviewed will answer? Does the diference in response matter?

What differences in behavior of the victims might you expect : An emissions fee is paid to the government, whereas an injurer, who issued and held liable, pays damages directly to the party harmed by an externality. What differences in the behavior of the victims might you expect to arise under these two arr..

Net receivables to cover sales discounts : Quick Finance assessed a finance charge of 6% of the total accounts receivable factored and retained an amount equal to 2% of the total receivables to cover sales discounts.

An office building in new york : An office building in New York uses thousands of fluorescent light bulb each year. The brand of bulb it currently uses has a mean life of 900 hours

Governmental fund financial statements : Are governmental fund financial statements sufficient for users seeking information about operational accountability? If so, why? If not, what type of information is needed to properly assess the effectiveness of the agency's operations that governme..

Determine the null and research hypotheses : Determine the null and research hypotheses; Select the correct template (templates for the Single Sample t-test, the Independent Samples t-test, and the ANOVA are included in the tabs that follow this tab);

How much heat does your body lose : how much heat does your body lose when 2.95g of sweat evaporates from your skin at 25 degrees Cecilius

User Account

All Pages