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There Is No Transfer of Ownership Over The P3M Receivables.: Disclosure Only

1. The document contains journal entries related to accounts receivable assignments and factoring transactions, including entries recording cash receipts from assignments and factoring, interest expense on notes payable, and allowance for doubtful accounts. 2. Key transactions include assigning receivables without and with notification of the debtor, factoring receivables without recourse at a discount, and recording sales returns against the receivable from the factor. 3. At year-end, receivables were assigned and the difference between the calculated and book allowance for doubtful accounts was recorded as doubtful accounts expense.

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Crizel Dario
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78 views

There Is No Transfer of Ownership Over The P3M Receivables.: Disclosure Only

1. The document contains journal entries related to accounts receivable assignments and factoring transactions, including entries recording cash receipts from assignments and factoring, interest expense on notes payable, and allowance for doubtful accounts. 2. Key transactions include assigning receivables without and with notification of the debtor, factoring receivables without recourse at a discount, and recording sales returns against the receivable from the factor. 3. At year-end, receivables were assigned and the difference between the calculated and book allowance for doubtful accounts was recorded as doubtful accounts expense.

Uploaded by

Crizel Dario
Copyright
© © All Rights Reserved
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Problem 8-1

1-Mar Cash 2,000,000.00


Notes Payable 2,000,000.00

There is no transfer of ownership over the P3M receivables.


Disclosure only.

1-Apr Cash 980,000.00


Sales Discount 20,000.00
Accounts Receivable 1,000,000.00

1-Jun Cash 2,000,000.00


Accounts Receivable 2,000,000.00

1-Sep Notes Payable 2,000,000.00


Interest Expense 120,000.00
Cash 2,120,000.00
Problem 8-3. Assignment Nonnotification
1-May AR - Assigned 800,000.00
Accounts Receivable 800,000.00
To reclassify your receivables.

Cash 620,000.00
Service Charge 20,000.00
Notes Payable 640,000.00

5-May Sales Returns and allowances 30,000.00


AR - Assigned 30,000.00

10-May Cash 490,000.00


Sales Discount 10,000.00
AR - Assigned 500,000.00

1-Jun Notes Payable 490,000.00


Interest Expense 12,800.00
Cash 502,800.00

7-Jun Allowance for Doubtful Accoun 10,000.00


AR- Assigned 10,000.00

20-Jun Cash 200,000.00


AR- Assigned 200,000.00

1-Jul Notes Payable 150,000.00


Interest Expense 3,000.00
Cash 153,000.00

Accounts Receivable 60,000.00


AR - Assigned 60,000.00
AR-Assigned 800,000.00
Notes Payable 640,000.00
Equity AR-Assigned 160,000.00
Problem 8-4 Assignment - Notification Basis
1-Jul AR- Assigned 1,500,000.00
Accounts Receivable 1,500,000.00

AR-Assigned 1,500,000.00
75% loan 1,125,000.00
Service charge 4% of AR assigned (60,000.00)
Proceeds from assignment 1,065,000.00

Cash 1,065,000.00
Service Charge 60,000.00
Notes Payable 1,125,000.00

1-Aug Notes Payable 800,000.00


AR-Assigned 800,000.00

Interest expense 22,500.00


Cash in Bank 22,500.00
1-Sep Notes Payable 325,000.00
Interest Expense 6,500.00
Cash 168,500.00
AR-Assgined 500,000.00

Accounts Receivable 200,000.00


AR-Assgined 200,000.00
Problem 8-8 Factoring - without recourse

AR factored 6,000,000.00
Commission - 15% (900,000.00)
Receivable from factor 10% (600,000.00)
ADA (200,000.00)
4,300,000.00

Cash 4,300,000.00
Commission expense 900,000.00
Receivable from factor 600,000.00
Allowance for Doubtful Accounts 200,000.00
Accounts Receivable 6,000,000.00

Cash 600,000.00
Receivable from factor 600,000.00
Problem 8-9
1-Jul Cash 680,000.00
Factoring fee 40,000.00
Receivable from Factor 80,000.00
Accounts Receivable 800,000.00

15-Jul Sales returns and allowanc 20,000.00


Receivable from Factor 20,000.00

31-Jul Cash 60,000.00


Receivable from Factor 60,000.00
Problem 8-12
30-Jun Cash 150,000.00
Factoring fee 10,000.00
Receivable from factor 40,000.00
Accounts Receivable 200,000.00

31-Dec AR- Assigned 300,000.00


AR - Unassigned 300,000.00

Cash 225,000.00
Service charge 15,000.00
Notes Payable 240,000.00

Accounts Receivable - Unassigned 1,000,000.00


Accounts Receivable - Assigned 300,000.00
Total outstanding AR 1,300,000.00
ADA 5% 65,000.00
Per book 30,000.00
DAE 35,000.00

Doubtful Accounts Expense 35,000.00


Allowance for Doubtful Accounts 35,000.00

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