Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 2. factoring (sale) of accounts receivable: santee

2. Factoring (sale) of Accounts Receivable: Santee Co. factored $60,000 of its accounts receivable with...

70.2K

Verified Solution

Question

Accounting

image
2. Factoring (sale) of Accounts Receivable: Santee Co. factored $60,000 of its accounts receivable with recourse to Commercial Finance Co. Commercial Finance reserved an amount equal to 10% of the factored receivables to cover potential adjustments for sales returns and allowance, and charged a 5% commission on the gross amount of the receivables. All conditions for a sale have been met. The fair value of recourse obligation is estimated to be $1,000. Required (10 points): Prepare the journal entries for Santee Co. to record the following: a. The sale of the receivables. b. Sales Returns and Allowances of $1,600 occurred on the factored accounts receivable. The company chooses to record the sales returns as they occur. c. There is no further sales return and allowance from the customer. Santee Co. received the remaining amount from Commercial Finance Co

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A random sample with replacement of size 100 is drawn from a population with mean 3.5...

Statistics
Q

A car accident expert is assigned to a case where the insurance company suspects the car...

Mechanical Engineering
Q

D6 4 Figure 6 9 shows the cross section of two circular cylinders at potential...

Physics
Q

B A C D Size Small Large Total 9 50 17 50 21 50 37...

Geometry
Q

Cash equivalents by definitiona. are a comparison of cash and liabilities.b. are expected to be...

Basic Math
Q

1 Twenty students participated in a psychology experiment w rates in two different situations 70...

Statistics
Q

The healing time for a broken clavicle is from a Normal distribution with a mean...

Algebra
Q

c5q3 Brad Essary owned a small company that sold garden equipment. The equipment was expensive,...

Accounting
Q

Vulcan Companys contribution format income statement for June is as follows: Vulcan...

Accounting
Q

The economy is populated by 100 agents. Each agent has to divide 1 unit of...

Accounting
Q

E-Tech Initiatives Limited plans to issue $700,000, 10-year, 5.00 percent bonds. Interest is payable annually...

Accounting
Q

Economic logic may tell us that a country with a higher interest rate, thus a...

Finance