Question
(a)On September 1 of the current year, Short-of-Cash Company transferred (factored) accounts receivable with a book value of $250,000 to a finance company. The transfer
(a)On September 1 of the current year, Short-of-Cash Company transferred (factored) accounts receivable with a book value of $250,000 to a finance company. The transfer was done with recourse, on a notification basis and Short-of-Cash Company does not retain the option to repurchase the accounts receivable, prior to maturity. Uncollectible accounts were estimated to be $9,800 and sales discounts to be $7,000.The finance company charged a finance fee of $9,000, advanced 80% of the book value of the receivables and the balance was held as a retainer.According to the terms of the contract, Short-of-Cash Company would be held responsible for any excess losses.(assume application of ASPE)
On September 30, Short-of-Cash Company received a statement
indicating that actual sales discounts were $7,000 and the actual uncollectible
accounts were $10,000 and all accounts had been otherwise settled.
required journal entries
the best answer to each of the following questions
with reference to the data in part (b) above - please enter your choice on the
answer sheet that has been provided for you:
(1)The correct journal entry to record the transfer
of the accounts receivable on September 1 is:
(a) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor41,000
Accounts
receivable250,000
(b) Sept 1
Cash200,000
Loss
on sale of
receivables18,800
Receivable
from
factor41,000
Accounts
receivable250,000
Recourse
Liability9,800
(c) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor50,800
Accounts
receivable250,000
Recourse
Liability9,800
Refer to the next page for choices (d) and (e)
Page 4 of
8ACCT201 - Test #1
Question #3 [(a) - part (1)] (continued):
(d) Sept 1
Cash200,000
Finance
Expense
9,000
Receivable
from
factor41,000
Note
payable250,000
(e) Sept 1
Cash200,000
Finance
Expense18,800
Receivable
from
factor31,200
Note
payable250,000
(2)The correct journal entry to record the information
from the September 30 statement is:
(a) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash24,000
Accounts
receivable250,000
Receivable
from
factor
41,000
(b) Sept 30 Recourse
liability9,800
Sales
discounts7,000
Cash24,200
Receivable
from factor
41,000
(c) Sept 30 Loss on sale of receivables
200
Recourse
liability9,800
Sales
discounts7,000
Cash24,000
Receivable
from factor
41,000
(d) Sept 30 Recourse
liability9,800
Loss
on sale of receivables
200
Sales
discounts7,000
Cash33,800
Receivable
from factor
50,800
Refer to the next page for choice (e)
Page 5 of
8ACCT201 - Test #1
Question #3 [(a) - part (2)] (continued):
(e) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash14,200
Accounts
receivable250,000
Receivable
from factor
31,200
(a)Use the same data as outlined in part (a), except
that Short-of- Cash Company does retain the option to repurchase the accounts receivable,
prior to maturity.
Required:
Choose the best answer to each of the following questions
with reference to the data in part (b) above - please enter your choice on the
answer sheet that has been provided for you:
(1)The correct journal entry to record the transfer
of the accounts receivable on September 1 is:
(a) Sept
1Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor41,000
Accounts
receivable250,000
(b) Sept 1
Cash200,000
Loss
on sale of
receivables18,800
Receivable
from
factor41,000
Accounts
receivable250,000
Recourse
Liability9,800
(c) Sept 1
Cash200,000
Loss
on sale of receivables9,000
Receivable
from
factor50,800
Accounts
receivable250,000
Recourse
Liability9,800
Refer to the next page for choices (d) and (e)
Page 6 of
8ACCT201 - Test #1
Question #3 [(b) - part (1)] (continued):
(d) Sept 1
Cash200,000
Finance
Expense
9,000
Receivable
from
factor41,000
Note
payable250,000
(e) Sept 1
Cash200,000
Finance
Expense18,800
Receivable
from
factor31,200
Note
payable250,000
(2)The correct journal entry to record the
information from the September 30 statement is:
(a) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash24,000
Accounts
receivable
250,000
Receivable
from factor
41,000
(b) Sept 30 Recourse
liability9,800
Sales
discounts7,000
Cash24,200
Receivable
from factor
41,000
(c) Sept 30 Loss on sale of
receivables 200
Recourse
liability9,800
Sales
discounts7,000
Cash24,000
Receivable
from factor
41,000
(d) Sept 30 Recourse
liability9,800
Loss
on sale of receivables
200
Sales
discounts7,000
Cash33,800
Receivable
from factor
50,800
Refer to the next page for choice (e)
Page 7 of
8ACCT201 - Test #1
Question #3 [(b) - part (2)] (continued):
(e) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash14,200
Accounts
receivable250,000
Receivable
from factor
31,200the best answer to each of the following questions
with reference to the data in part (b) above - please enter your choice on the
answer sheet that has been provided for you:
(1)The correct journal entry to record the transfer
of the accounts receivable on September 1 is:
(a) Sept 1 Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor41,000
Accounts
receivable250,000
(b) Sept 1
Cash200,000
Loss
on sale of receivables18,800
Receivable
from
factor41,000
Accounts
receivable250,000
Recourse
Liability9,800
(c) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor50,800
Accounts
receivable250,000
Recourse
Liability9,800
Refer to the next page for choices (d) and (e)
Page 4 of
8ACCT201 - Test #1
Question #3 [(a) - part (1)] (continued):
(d) Sept 1
Cash200,000
Finance
Expense
9,000
Receivable
from
factor41,000
Note
payable250,000
(e) Sept 1
Cash200,000
Finance
Expense18,800
Receivable
from
factor31,200
Note
payable250,000
(2)The correct journal entry to record the
information from the September 30 statement is:
(a) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash24,000
Accounts
receivable250,000
Receivable
from factor
41,000
(b) Sept 30 Recourse
liability9,800
Sales
discounts7,000
Cash24,200
Receivable
from factor
41,000
(c) Sept 30 Loss on sale of
receivables 200
Recourse
liability9,800
Sales
discounts7,000
Cash24,000
Receivable
from factor
41,000
(d) Sept 30 Recourse
liability9,800
Loss
on sale of receivables
200
Sales
discounts7,000
Cash33,800
Receivable
from factor
50,800
Refer to the next page for choice (e)
Page 5 of
8ACCT201 - Test #1
Question #3 [(a) - part (2)] (continued):
(e) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash14,200
Accounts
receivable250,000
Receivable
from factor
31,200
(
Required:
Choose the best answer to each of the following questions
with reference to the data in part (b) above - please enter your choice on the
answer sheet that has been provided for you:
(1)The correct journal entry to record the transfer
of the accounts receivable on September 1 is:
(a) Sept
1Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor41,000
Accounts
receivable250,000
(b) Sept 1
Cash200,000
Loss
on sale of
receivables18,800
Receivable
from
factor41,000
Accounts
receivable250,000
Recourse
Liability9,800
(c) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor50,800
Accounts
receivable250,000
Recourse
Liability9,800
(d) Sept 1
Cash200,000
Finance
Expense
9,000
Receivable
from
factor41,000
Note
payable250,000
(e) Sept 1
Cash200,000
Finance
Expense18,800
Receivable
from
factor31,200
Note
payable250,000
(2)The correct journal entry to record the
information from the September 30 statement is:
(a) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash24,000
Accounts
receivable
250,000
Receivable
from factor
41,000
(b) Sept 30 Recourse
liability9,800
Sales
discounts7,000
Cash24,200
Receivable
from factor
41,000
(c) Sept 30 Loss on sale of
receivables
200
Recourse
liability9,800
Sales
discounts7,000
Cash24,000
Receivable
from factor
41,000
(d) Sept 30 Recourse
liability9,800
Loss
on sale of receivables
200
Sales
discounts7,000
Cash33,800
Receivable
from
factor
50,800
Refer to the next page for choice (e)
Page 7 of
8ACCT201 - Test #1
Question #3 [(b) - part (2)] (continued):
(e) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash14,200
Accounts
receivable250,000
Receivable
from factor31,200the
best
answer to each of the following questions with reference to the
data in part (b) above - please enter your choice on the answer sheet that has
been provided for you:
(1)The correct journal entry to record the transfer
of the accounts receivable on September 1 is:
(a) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor41,000
Accounts
receivable250,000
(b) Sept 1
Cash200,000
Loss
on sale of
receivables18,800
Receivable
from factor41,000
Accounts
receivable250,000
Recourse
Liability9,800
(c) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor50,800
Accounts
receivable250,000
Recourse
Liability9,800
Refer to the next page for choices (d) and (e)
Page 4 of
8ACCT201 - Test #1
Question #3 [(a) - part (1)] (continued):
(d) Sept 1
Cash200,000
Finance
Expense
9,000
Receivable
from
factor41,000
Note
payable250,000
(e) Sept 1
Cash200,000
Finance
Expense18,800
Receivable
from
factor31,200
Note
payable250,000
(2)The correct journal entry to record the
information from the September 30 statement is:
(a) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash24,000
Accounts
receivable250,000
Receivable
from factor
41,000
(b) Sept 30 Recourse
liability9,800
Sales
discounts7,000
Cash24,200
Receivable
from factor
41,000
(c) Sept 30 Loss on sale of
receivables
200
Recourse
liability9,800
Sales
discounts7,000
Cash24,000
Receivable
from factor
41,000
(d) Sept 30 Recourse liability9,800
Loss
on sale of receivables
200
Sales
discounts7,000
Cash33,800
Receivable
from factor
50,800
Refer to the next page for choice (e)
Page 5 of 8ACCT201 - Test #1
Question #3 [(a) - part (2)] (continued):
(e) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash14,200
Accounts
receivable250,000
Receivable
from factor
31,200
(a)Use the same data as outlined in part (a), except
that Short-of- Cash Company does retain the option to repurchase the accounts receivable,
prior to maturity.
the best
answer to each of the following questions with reference to the
data in part (b) above - please enter your choice on the answer sheet that has
been provided for you:
(1)The correct journal entry to record the transfer
of the accounts receivable on September 1 is:
(a) Sept
1Cash200,000
Loss
on sale of
receivables9,000
Receivable
from
factor41,000
Accounts
receivable250,000
(b) Sept 1
Cash200,000
Loss
on sale of
receivables18,800
Receivable
from
factor41,000
Accounts
receivable250,000
Recourse
Liability9,800
(c) Sept 1
Cash200,000
Loss
on sale of
receivables9,000
Receivable
from factor50,800
Accounts
receivable250,000
Recourse
Liability9,800
(d) Sept 1
Cash200,000
Finance
Expense
9,000
Receivable
from
factor41,000
Note
payable250,000
(e) Sept 1
Cash200,000
Finance
Expense18,800
Receivable
from
factor31,200
Note
payable250,000
(2)The correct journal entry to record the
information from the September 30 statement is:
(a) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash24,000
Accounts
receivable
250,000
Receivable
from factor
41,000
(b) Sept 30 Recourse
liability9,800
Sales
discounts7,000
Cash24,200
Receivable
from
factor
41,000
(c) Sept 30 Loss on sale of
receivables
200
Recourse
liability9,800
Sales
discounts7,000
Cash24,000
Receivable
from factor
41,000
(d) Sept 30 Recourse
liability9,800
Loss
on sale of receivables
200
Sales
discounts7,000
Cash33,800
Receivable
from
factor
50,800
(e) Sept 30 Allowance for doubtful
accounts10,000
Sales
discounts7,000
Note
payable250,000
Cash14,200
Accounts
receivable250,000
Receivable
from factor
31,200
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MIS Management Information Systems
Authors: Hossein Bidgoli
8th edition
978-1337406932, 1337406937, 978-1337406925, 1337406929, 978-0357004357
