User Account

All Pages

What net profit did Ethel end up earning

Assignment Help Accounting Basics
Reference no: EM132514807

Question - Lucy factored $4,000,000 of accounts receivable with Ethel on a with recourse basis on May 1. (Assume the transaction meets the criteria to be classified as a sale.) Ethel assessed a finance charge equal to 1.25% of the ARs factored. Ethel retained $40,000 to cover potential sales returns. Lucy estimated her recourse liability to be $49,000. During May and June, customers returned merchandise to Lucy on $54,000 of credit sales. All of the returns related to receivables from the $4,000,000 pool of ARs sold. After taking the returns into consideration, Ethel collected $3,900,000 of the factored receivables. On June 30, Lucy and Ethel "settled up" meaning Lucy and Ethel paid each other any cash that was due to the other.

Required -

(a) Prepare the entry Lucy should make on May 1.

(b) Prepare the entry Lucy should make on June 30.

(c) Based on the above facts, what net profit did Ethel end up earning?

(d) Based on the above facts, what net expense did Lucy end up incurring?

Reference no: EM132514807

Questions Cloud

How to calculate the needed sample with statcrunch : How large a sample is needed to estimate µ with 95% confidence so the margin of error is no greater than 0.5 g/dL?
What was the balance in sonjas allowance : Sonja's 12-31-16 unadjusted trial balance shows accounts receivable of $2,500,000. What was the balance in Sonja's allowance for doubtful accounts
Why it is important to appraise community resources : Explain the role of the community health nurse in partnership with community stakeholders for population health promotion. Explain why it is important to.
Group of researchers is investigating jungles : A group of researchers is investigating jungles of Kashyyk in search of Wookies. Researchers currently believe that Wookies live in small tribes
What net profit did Ethel end up earning : Lucy factored $4,000,000 of accounts receivable with Ethel on a with recourse basis on May 1. What net profit did Ethel end up earning
Confidence interval for the mean number of books people : A survey was conducted that asked 1019 people how many books they had read in the past year. Results indicated that x equals=12.5 books and s equals
Journalize the stock transactions of Dreamy Company : On September 1, 2018, 3,000 treasury shares are sold at $5 per share. Journalize the stock transactions of Dreamy Company in 2018
Compute the net cash inflow anticipated from sale of device : Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from sale of the device for each year over the next six years.
Confidence interval for the population mean : What is the 98% confidence interval for the population mean? Continue to use s = 11.

Reviews

Write a Review

Accounting Basics Questions & Answers

  If cityfarm has 5 million per day in collections and 3

city farm insurance has collection centersacross the country to speed up collections. the company also makes

  Prepare a statement of cash flows for warnick company

Required: Prepare a statement of cash flows for Warnick Co. for the year ended May 31, Year2. Use the indirect method

  Prepare journal entries for the transactions

Prepare journal entries for the transactions listed below for Raleigh Corporation

  The ledger of quentin company contains the following

the ledger of quentin company contains the following balances quentin capital 31120 quentin drawing 1680 service

  Journalize saddlebag coporation and bioscan corporation

Saddlebag Co. sold merchandise to Bioscan Co. on account, $17,500, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $10,000.

  The home model is a high-volume 54000 units half-gallon

fireout inc. manufactures steel cylinders and nozzles for two models of fire extinguishers 1 a home fire extinguisher

  For which events above should an expense be recorded

Helping Hands uses an accrual basis accounting. For which of the events above should an expense be recorded in May? Ineach case, how much expense should be recorded? If an eventdoes not involve an expense, specify why not.

  Westin watercrafts predetermined overhead rate for year

westin watercrafts predetermined overhead rate for year 2011 is 200 of direct labor. information on the companys

  Determine net present value of purchasing the new freezer

Determine the Net Present Value of purchasing the new freezer using a required rate of return of 14%. Should bravo purchase the freezer

  What is the adjusting entry on may

On March, 2013, XYZ Company borrowed $50,000 and gave the bank a promissory note with an intrest rate of 6%, What is the adjusting entry on May 31, 2013

  What is the rate staley uses to apply overhead costs

At the beginning of 2014, Staley had no inventory of any kind. What is the rate Staley uses to apply overhead costs to jobs in 2014

  Dt co produces picture frames it takes 3 hours of direct

dt co. produces picture frames. it takes 3 hours of direct labor to produce a frame. dts standard labor cost is 11.00

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd