Impassive Company factored $500,000 of accounts receivable for $400,000 due to a critical cash position. Factoring involves selling accounts receivable to a third party for immediate cash. Impassive Company recorded the factoring by debiting cash and crediting accounts receivable.
Impassive Company factored $500,000 of accounts receivable for $400,000 due to a critical cash position. Factoring involves selling accounts receivable to a third party for immediate cash. Impassive Company recorded the factoring by debiting cash and crediting accounts receivable.
Impassive Company factored $500,000 of accounts receivable for $400,000 due to a critical cash position. Factoring involves selling accounts receivable to a third party for immediate cash. Impassive Company recorded the factoring by debiting cash and crediting accounts receivable.
Impassive Company factored $500,000 of accounts receivable for $400,000 due to a critical cash position. Factoring involves selling accounts receivable to a third party for immediate cash. Impassive Company recorded the factoring by debiting cash and crediting accounts receivable.
Download as DOCX, PDF, TXT or read online from Scribd
Download as docx, pdf, or txt
You are on page 1/ 2
Factoring of receivables
Impassive Company is bothered about the cash position as collections of accounts
receivable are delayed and obligations are currently maturing. The entity had the following accounts receivable at year-end: Accounts receivable 500,000 Allowance for doubtful accounts 30,000 Because of the critical cash position, the entity factored the accounts receivable for P400,000 Required: Prepare journal entry to record the factoring of the accounts receivable. Factoring of receivables Dainty Company sold accounts receivable without recourse with face amount of P6,000,000 the factor charged 15% commission on all accounts receivable factored and withheld 10% of the accounts factored as protection against customer returns and other adjustments. Required: Prepare journal entries to record the factoring and the subsequent collection of the factors holdback. Factoring of receivables Generous Company provided the following information with respect to factoring of accounts receivable. July 1 Factored P800,000 of accounts receivable without recourse with a bank on notification basis. The bank charged a factoring fee of 5% of the amount of accounts receivable factored and withheld 10% of the accounts receivable factored to cover sales return and allowances. July 15 Received notice from the bank that factored accounts are fully collected less sales return and allowances of P20,000 July 31 Received a check from the bank as a final settlement of the factoring contract. Required: Prepare journal entries to record the transactions. Factoring of receivables Commonplace Company provided the following transactions for the current year. June 1 Sold merchandised to a customer for P500,000 terms 2/10,n/30. 3 Factored the account to a bank. The bank charged 5% commission and 25% holdback.
Granted the customer a credit allowance of P50,000 for damage in the shipment.
11
the customer paid in full its account to the bank.
15
Final settlement was made with the bank.
Required: Prepare journal entries to record the transactions.
