1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
tester [92]
3 years ago
15

Mountain High Ice Cream Company transferred $68,000 of accounts receivable to the Prudential Bank. The transfer was made with re

course. Prudential remits 90% of the factored amount to Mountain High and retains 10% to cover sales returns and allowances. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,800). Mountain High anticipates a $3,800 recourse obligation. The bank charges a 2% fee (2% of $68,000), and requires that amount to be paid at the start of the factoring arrangement.
Required:
Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
Business
1 answer:
horrorfan [7]3 years ago
4 0

Answer:

Entries are given below

Explanation:

Calculations

Cash = ($68,000 x 90%) - ($68,000 x 2%)

Cash = $61,200 - $1,360

Cash = $59,840

Loss on sale = ($68,000 + $3,800) - ($59,840 +$5,800)

Loss on sale =  $71,800 - $65,640

Loss on sale = $6,160

Entries

                                                   DEBIT      CREDIT

Cash                                           $59,840

Loss on sale                              $6,160

Receivable from factor            $5,800

Recourse liability                                        $3,800

Receivables                                                  $68,000

You might be interested in
FORco, a country F corporation, wants to open a sales office in the United States. FORco does not form a U.S. subsidiary, but in
wariber [46]

Answer:

C. Subject to 30% withholding tax under the Branch Interest Withholding tax rules.

Explanation:

Options are <em>"A. No interest withholding as the interest is deemed paid by the foreign corporation, since the U.S. branch is not a U.S. corporation. B. No interest withholding tax since the recipient of the interest is a foreign corporation. C. Subject to 30% withholding tax under the Branch Interest Withholding tax rules. D. Subject to 15% withholding tax under the Branch Profits tax rules. Reset Selection"</em>

The interest payment will be subject to 30% withholding tax under the Branch Interest Withholding tax rules. Interest paid by a branch's U.S. trade or business, is considered U.S. source income and is subject to U.S. withholding tax at a rate of 30%, unless the tax is reduced or eliminated by a specific treaty or Code provision.

6 0
2 years ago
Worldwide​ Wholesalers, Inc. has decided that instead of having its employees manage its raw materials​ inventory, it will pay i
Anastasy [175]

Answer:

Worldwide​ Wholesalers, Inc. has decided that instead of having its employees manage its raw materials​ inventory, it will pay its suppliers to store and deliver the products as needed. What action has Worldwide​ taken?

A.  Operations control

B.  Outsourcing

C.  ​Value-added analysis

D.  Business process re-engineering

E.  Quality control

Answer: B

Explanation:

Outsourcing is the business practice of contracting a gathering outside an organization to perform benefits and make products that generally were acted in-house by the organization's own workers and staff. Outsourcing is a training for the most part attempted by organizations as a cost-cutting measure. In that capacity, it can influence a wide scope of employments, going from client care to assembling to the back office. Outsourcing can assist organizations with decreasing work costs fundamentally. At the point when an organization utilizes outsourcing, it enrolls the assistance of outside associations not partnered with the organization to finish certain errands. The outside associations normally set up various remuneration structures with their representatives than the outsourcing organization, empowering them to finish the work for less cash. This at last empowers the organization that decided to redistribute to bring down its work costs.

5 0
3 years ago
What is the first step in creating a cash flow statement?
Nimfa-mama [501]
Thinking summarizes the operating, financing and investing activities of an entity
3 0
3 years ago
Read 2 more answers
Apple, Dell, Seagate, and other U.S. companies have been criticized for sending manufacturing jobs to other countries to cut dow
Alja [10]

Answer:

offshoring

Explanation:

buisness process from one to another

7 0
2 years ago
Borrowers choosing an adjustable rate mortgage
o-na [289]

Answer:

C. Often pay a lower interest rate during the first few years.

Explanation:

I just took the quiz and got it right.

7 0
2 years ago
Read 2 more answers
Other questions:
  • Approximately how much of the initial investment's value would be lost after 15 years at 3% inflation?
    6·2 answers
  • 19. Who among the following is not covered under the Occupational Safety and Health Act of 1970?
    5·1 answer
  • What are two ways to begin setting up a recurring transaction in quick books online
    15·1 answer
  • If purchasing power parity holds, then if the price of a basket of goods in the U.S. rose from $1.000 to $1,200 and the price of
    6·1 answer
  • While Influx Electronics Inc. incurs $350 to manufacture a laptop, its competitor, Hearthstone Electronics Inc., incurs $300. Ho
    10·1 answer
  • What is a commission?​
    14·1 answer
  • Bonner Automotive has shareholders' equity of $218,700. The firm owes a total of $141,000 of which 40 percent is payable within
    10·1 answer
  • i have a kid named aj he is talking to himself and he is allways yelling can you have me evidence he is from windy hill middle s
    14·2 answers
  • Bronks Co. had pension plan assets and PBO of $160,000 on 1/1/19. Service cost for the year was $40,000. It contributed $30,000
    7·1 answer
  • What is the purpose of dark tourism​
    14·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!