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
Damm [24]
3 years ago
5

A company factored $40,000 of its accounts receivable and was charged a 3% factoring fee. The journal entry to record this trans

action would include a:
Multiple Choice
a. Debit to Cash of $40,000 and a credit to Accounts Receivable of $40,000.
b. Debit to Cash of $38,800, a debit to Factoring Fee Expense of $1,200, and a credit to Accounts Receivable of $40,000.
c. Debit to Cash of $40,000 and a credit to Notes Payable of $40,000.
d. Debit to Cash of $41,200 and a credit to Accounts Receivable of $41,200.
e. Debit to Cash of $40,000, a credit to Factoring Fee Expense of $1,200, and a credit to Accounts Receivable of $38,800.
Business
1 answer:
bezimeni [28]3 years ago
3 0

Answer:

Correct answer is B, Debit cash $38,800, debit factoring fee expense $1,200 and a credit of Accounts receivable of $40,000

Explanation:

Factoring is one way to raise fund for immediate use of the company. It is a way to sell accounts receivable of the company. The above-mentioned problem is to sell accounts receivable (factored) with the corresponding factoring fee of 3% and that is $1,200 (40,000 x 3%). In effect of this fee, the company will receive cash less than the amount of its accounts receivable sold. The company will record the inflow of cash at $38,800 (40,000 - 3%) and will also recognize an expense incurred during the factoring in the amount of $1,200 and finally will credit the sold accounts receivable in the amount of $40,000.

You might be interested in
Which of the following is not a need-based source of financial aid
yanalaym [24]
B. athletic scholarship
6 0
3 years ago
Read 2 more answers
The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of compu
salantis [7]

Answer:

hejjhenenshnwhajwjejehhesnwnw

7 0
2 years ago
Read 2 more answers
Kearney, Inc., makes kitchen tools. Company management believes that a new model of coffee grinder would sell well at a price of
IRINA_888 [86]

Answer:

$0.15 hours per unit

Explanation:

Given that

Direct material cost = $16

Assume Direct labor cost = X

Manufacturing overheads = $18

Profit margin = 20%

Direct labor per hour cost = $28

The computation of direct labor-hour input is shown below:-

Total manufacturing cost = X + $34

Total cost of goods sold = (X + $34) × 1.7 = $66

Direct labor cost per unit

= (X + $34) = $38.82

= $38.82 - $34

= $4.32

Direct labor hours per unit = Direct labor cost per unit ÷ Direct labor per hour cost

= $4.32 ÷ $28

= $0.15 hours per unit

3 0
3 years ago
When venturing into a foreign country for business, which controllable risk will you most likely face?
OLEGan [10]

The answer would be C worker strikes due to cultural differences

4 0
3 years ago
Computers Inc. is a United States computer and consumer electronics company that designs and manufactures electronic devices. Co
Galina-37 [17]
No the electronic devices where made to text and easier to text
5 0
3 years ago
Other questions:
  • Akila went to the store for furniture polish, carrots, pencils, ham, sponges, celery, notebook paper, and salami. She remembered
    6·1 answer
  • Which of the following activities do marketers use as a way to lower product costs? A. Shop around for the best suppliers B. Off
    6·2 answers
  • Garfield Corp. expects to sell 1,300 units of its pet beds in March and 900 units in April. Each unit sells for $110. Garfield’s
    11·1 answer
  • Secondary technology skills are skills that may be improved as the online class progresses. T or F
    6·2 answers
  • You are placing an order for printer paper for your office, and the supplier offers to
    15·1 answer
  • Flounder Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the busines
    5·1 answer
  • A company manufacturing shirts for a department store decides to create a new style of cotton shirt. The company would most like
    15·1 answer
  • PLEASE ANSWER THESE IT WOULD BE A HUGE HELP
    8·2 answers
  • Jarett Motors is trying to decide whether it should keep its existing car washing machine or purchase a new one that has technol
    6·1 answer
  • GFB has created a socially conscious culture throughout the company. The first step GFB always follows in improving U.S. busines
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!