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nata0808 [166]
3 years ago
8

Blossom Furniture factors $710000 of receivables to Blue Spruce Factors, Inc. Blue Spruce Factors assesses a 2% service charge o

n the amount of receivables sold. Blossom Furniture factors its receivables regularly with Blue Spruce Factors. What journal entry does Blossom make when factoring these receivables?
Business
1 answer:
Wittaler [7]3 years ago
4 0

Answer:

Debit : Accounts Receivables : $695,800

Debit : Service Charge Expense : $14,200

Credit : Sales : $710,000

Explanation:

Factoring is a process by which a business sells its accounts receivables to a third party (factor) at a particular discount or service charge. Factoring generally occurs when a business wants to meet it’s immediate cash requirements. The factoring company in this case, charges 2% service fee of $710,000 accounts receivables. In monetary terms this is : 710,000 x 2% = $14,200. This amount would be an expense incurred by the business. The double entry to record this transaction in the books of the business is as follows:

Debit : Accounts Receivables : $695,800

Debit : Service Charge Expense : $14,200

Credit : Sales : $710,000

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Answer:

3 years

Explanation:

The computation of the time period is shown below

Present value of annuity = Annuity × [1 - (1 + interest rate)^-time period] ÷ rate

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(1.05)^-n = 1 - ($2000 ÷ $14,688.4)

( 1 ÷ 1.05)^n = 0.86383813

Now take the log to the both sides

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= 3 years

6 0
3 years ago
If Sue, owner of Camp Bow Wow in Boulder, Colorado, says Heidi Granahl, CEO and founder of Camp Bow Wow, is a leader who establi
sashaice [31]

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the correct answer to this question is the "Country Club Leadership Style". However, what you should remember is that you might come across different names for this such as "Laizes Faire Leadership", etc...

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At its $60 selling price, Atlantic Company has sales of $15,000, variable manufacturing costs of $4,000, fixed manufacturing cos
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Answer:

$36

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nikdorinn [45]

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