Use the information below to answer the next 3 questions ABC Co. had the following...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Use the information below to answer the next 3 questions ABC Co. had the following balances on January 1, 2013: Accounts Receivable: $1,000,000 Allowance for doubtful accounts: $20,000 During January, ABC collected $300,000 of their receivables. ABC also made cash sales of $500,000 and credit sales of $400,000. ABC wrote off $5,000 in receivables and collected an additional $3,000 in receivables that were previously written off. On January 2, ABC factored $250,000 of their receivables with Finance, Inc. The three conditions were met and the factoring agreement was with recourse. Finance, Inc. assessed a 2% factoring fee and retained 3% of the factored receivables to protect against sales discounts or returns. ABC believes 4% of the factored receivables will be uncollectable. Sales returns and discounts for the month totaled $1,000. At the end of the month, ABC estimates their bad debt as 4% of using the Balance Sheet method (ignoring any Receivable from Factor accounts that may be recorded).
Determine the amount of cash ABC would receive from Finance, Inc. at the time the receivables were factored
Determine Bad Debt Expense for the month of January.
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!
