Question
A factor has agreed to purchase selected accounts receivable from Epic Company. The factor charged 5% commission and 20% holdback. The following accounts are sold
A factor has agreed to purchase selected accounts receivable from Epic Company. The factor charged 5% commission and 20% holdback. The following accounts are sold on july 26:
On july 28, Customer B was granted a credit of 50,000 for returned merchandise. Final settlement is made with the factor on August 31.
Required:
Prepare journal entries to record the transactions on the book of Epic Company.
| Invoice Date | Customer | Amount |
|
|
|
|
| July 23 | A | 300,000 |
| July 25 | B | 500,000 |
| July 24 | C | 200,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
First lets calculate the amounts that Epic Company will receive from the factor after considering th...
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Step: 2
Step: 3
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Intermediate Algebra
Authors: Margaret Lial, John Hornsby, Terry McGinnis
13th Edition
0134895983, 978-0134895987
