Information on Sheffield Corp., which reports under ASPE, follows: July 1 Sheffield Corp. sold to Blossom Company
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Information on Sheffield Corp., which reports under ASPE, follows:
July 1 | Sheffield Corp. sold to Blossom Company merchandise having a sales price of $8,200, terms 2/10, n/60. Ignore cost of goods sold entry. | |
3 | Blossom Company returned defective merchandise having a sales price of $600. The merchandise was not saleable and was scrapped. | |
5 | Accounts receivable of $18,100 are factored with Blue Corp. without recourse at a financing charge of 9%. Cash is received for the proceeds and collections are handled by the finance company. | |
9 | Specific accounts receivable of $14,200 (gross) are pledged to Landon Credit Corp. as security for a loan of $11,400 at a finance charge of 2% of the loan amount plus 9% interest on the outstanding balance. Sheffield will continue to make the collections. All the accounts receivable pledged are past the discount period and were originally subject to a 3% discount. | |
Dec. 29 | Blossom Company notifies Sheffield that it is bankrupt and will be able to pay only 10% of its account. Give the entry to write off the uncollectible balance using the allowance method. |
Prepare all necessary journal entries on Sheffield Corp.’s books.
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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