The trial balance before adjustment for the Martinez Company shows the following balances. Dr. chrome accounts receivable
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Question:
The trial balance before adjustment for the Martinez Company shows the following balances.
Dr. | chrome | |||
accounts receivable | $84,700 | |||
Allowance for doubtful accounts | 2,700 | |||
sales revenue | $462,400 |
Using the above data, provide the necessary journal entries to record each of the following cases. (Each situation is independent.)
1. | To get additional cash, Martinez calculates without recourse $23,300 of accounts receivable with Stills Finance. The finance charge is 11% of the factored amount. | |
2. | To obtain a one-year loan of $61,600, Martinez assigns $70,800 of specific accounts receivable to Crosby Financial. The finance charge is 8% of the loan; cash is received and accounts are turned over to Crosby Financial. | |
3. | The company wants to keep the Allowance for Bad Debtors at 7% of gross accounts receivable. | |
4. | Based on an aging analysis, a provision of $6,174 must be declared. Assume the assignment has a credit balance of $1,041. |
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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