ASSETS 111 Cash 121 Accounts Receivable 123 Receivable from Factor 124 Accounts Receivable Assigned 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 221 Notes Payable 226 Roturn Liability 231 Salaries Payable 242 Payable to Factor 250 Uneamed Revenue 261 Income Taxes Payable REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 533 Factoring Expense 534 Assignment Service Charge Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 601 Loss from Sale of Receivables 910 Income Tax Expense GENERAL JOURNAL White Corporation has enfered into an agreement to transfer accounts receivable to Murphy Company. Under the terms of this agreement, White receives 80s, of the value of all the transferred accounts receivable (to reflect credit risk) and is charged a 1 s service charge, which is based upon the dollar amount of transferred receivables. Interest is charged at an annual interest rate of 12% of any outstanding loan balance. The transferred receivables will continue to be collected by White with any cash flows being remitted to Murphy at the end of each month. White is not allowed to transfer the receivables to anyone else. White normaly transters its accounts receivable. The following seiectied transactions relate to this agreement: Dec. 1 Accounts receivable of $150,000 are transferred. 11 A sales retum of $1,000 on a transferred account is made. Assume that no accrual for estimated sales returns related to this receivable has been made. 31 Colections are made on $90,000 of the transferred accounts recevivale plus intereu for the month of December. This amoum is remitied to Murphy. PAGE 9 GENERAL JOURNAL Score: 0/150 \begin{tabular}{|c|c|c|c|c|c|} \hline & DATE & ACCOUNT TITLE & POST: REF. & DEBIT & CREOIT \\ \hline 1 & & & & & \\ \hline 2 & & & & & \\ \hline 3 & & & & & \\ \hline 4 & & & & & \\ \hline 5 & & & & & \\ \hline 6 & & & & & 8 \\ \hline? & & & & & \\ \hline 8 & & & & & \\ \hline 9 & & & & & \\ \hline 10 & & & & & \\ \hline 11 & & & & & \\ \hlineA12 & & & & & \\ \hline \end{tabular} Whipe Corporation has ontered into an agreernent to transler acccunts recelvable to Murphy Compary. Under the terms of this agreement, Whife roceives Boss of the value of al the transferred accounts receivable (to teflect credit risk) and is charged a 1% servico charge, which is basod upon the dollar amount of transferred receivabies interest is charged at an annual interest rate of 12% of any outstanding loan balance. The transferred receivables will continue so be colected by White with any cash flows being remitted io Murphy at itse end of Dec. 1 Accounts receivable of $150,000 are transfered returns related to tive recelyable has been made. 31 Colections are made on $00,000 of the transteffed acobunis receivable plus interest for the monet d December. This amount is remined to Murpty. Pequired: 1 Has white bassforted control of the receirables? 2. Prepare joumal endries on White \& books to recovd the preceding travsactions
