Sales without Recourse What Were You Inking (a tattoo removal company) sells (factors) $400,000 of accounts...
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Sales without Recourse What Were You Inking (a tattoo removal company) sells (factors) $400,000 of accounts receivable to Factor, Inc. without recourse. Factor, Inc. charges a 2% finance charge, and retains 4% of receivables for possible adjustments due to sales discounts or returns. Record the sale from What Were You Inking's perspective: Five days after selling the receivables to Factor, Inc. a customer pays off their accounts receivable balance to Factor, Inc. less a $400 sales discount. Record the effects of this on What Were You Inking: Six days after the sale of receivables to Factor, Inc. one customer files for bankruptcy. They owe $1,000 in AR. Record this from What Were You Inking's perspective Record this from Factor Inc.'s perspective: Assume there were no additional sales discounts or sales returns. Record this for What Were You Inking. 102 Sales without Recourse What Were You Inking (a tattoo removal company) sells (factors) $400,000 of accounts receivable to Factor, Inc. without recourse. Factor, Inc. charges a 2% finance charge, and retains 4% of receivables for possible adjustments due to sales discounts or returns. Record the sale from What Were You Inking's perspective: Five days after selling the receivables to Factor, Inc. a customer pays off their accounts receivable balance to Factor, Inc. less a $400 sales discount. Record the effects of this on What Were You Inking: Six days after the sale of receivables to Factor, Inc. one customer files for bankruptcy. They owe $1,000 in AR. Record this from What Were You Inking's perspective Record this from Factor Inc.'s perspective: Assume there were no additional sales discounts or sales returns. Record this for What Were You Inking. 102
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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