Explorer Company finances some of its current operations by factoring its accounts receivable to a finance company.
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Question:
Explorer Company finances some of its current operations by factoring its accounts receivable to a finance company. On July the company factored P of its accounts receivable to Atlas Finance Company. Purchase price was of the receivables factored. Atlas withheld of the purchase price as protection against sales returns and allowances. Sales returns recorded by Explorer on the factored accounts receivable totaled P; the balance of the factor's holdback was settled by the finance company on August
REQUIRED:
a What was the net cash received by Explorer from this factored accounts?
b Give the entries in the books of Explorer to record the foregoing in the months of July and August
Related Book For
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel
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