You sold $300,000 of accounts receivable to Friendly Factors Inc. on a with recourse basis. Friendly assesses a 2% financecharge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possibleadjustments. You estimate that future uncollectible accounts total $15,000 1) How much cash will you receive as a resultof the sale? 2) How much is the gain or loss on the sale? (indicate gain or loss) 3) The journal entry to record this saleshould include which of the following? a) $18,000 DR to Due from Factor; b) $315,000 CR to accounts receivable; c) $15,000 DR to Recourse Obligation

The objective of the question is to calculate the cash received from the sale of accounts…

Answered: You sold $300,000 of accounts…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The company purchased the equipment 600,000. The interest rate of bank is 12,400. The loan is denominated in OMR, matures on March 31 2019. The spot rate of OMR 2.50. What is the value of interest expenses? Select one: a. None of the other points b. OMR 12,400 c. OMR 1,500,000 d. OMR 31,000
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