accounting 310

Project Description:

the trail balance before adjustment for sam company shows the following
debit credit
net sales $860,000
accounts receivable 338,000
allowance for doubtful accounts $4,240
consider the following independent situations
1. to obtain additional cash, sam factors without recourse $50,000 of accounts receivable with mark finance. the finance charge is 11% of the amount factored
2. to obtain a 1-year loan of $75,00, sam assigns $80,000 of specific receivables to mike financial. the finance charge is 9% of the loan, the cash received and the accounts turned over mike financial.
3. the company wants to maintain allowance for doubtful accounts of 6% of gross accounts receivable
4. the company wishes to increase the allowance account by 2% of net sales
1. using the data above, give the journal entries required to record situations 1-4
2. discuss how analysis based on the current ratio and the accounts receivable turnover would be affected if sam had transferred the receivables in situation 1 using a secured borrowing
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Price Type: Fixed

Project Budget: $20 to $50
Total Proposals: 16
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