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
Fed [463]
3 years ago
13

Faeber Textile Company frequently factors its accounts receivable. During 2019, Faeber made credit sales of $100,000 to customer

s, under terms of 2/10, n/30. Faeber records its credit sales using gross price. In 2019, Faeber sold $70,000 of these receivables to a factor. The factor remitted 90% of the accounts receivable factored and charged a 12% commission on the gross amount of the factored receivables. The factoring agreement also requires Faeber to be responsible for any cash discounts taken by customers upon payment of the factored receivables. Faeber is charged for these cash discounts upon reimbursement by the factor. During 2019, the factor collected the remaining amount of the factored receivables, minus the 2% discount on 94% of the collected receivables, and returned the balance owed to Faeber. Faeber collected the remaining amount of the unfactored accounts receivable, minus the 2% discount on 96% of the collected receivables. Required: Prepare all the journal entries necessary for Faeber to record the preceding information.
Business
1 answer:
Tems11 [23]3 years ago
3 0

Answer:

Faeber Textile Company frequently factors its accounts receivable. During 2019, Faeber made credit sales of $100,000 to customers, under terms of 2/10, n/30. Faeber records its credit sales using gross price.

Dr Accounts receivable 100,000

    Cr Sales revenue 100,000

In 2019, Faeber sold $70,000 of these receivables to a factor. The factor remitted 90% of the accounts receivable factored and charged a 12% commission on the gross amount of the factored receivables.

Dr Cash 54,600

Dr Factoring expense 8,400 (= $70,000 x 12%)

Dr Factoring receivables 7,000

    Cr Accounts receivable 70,000

The factoring agreement also requires Faeber to be responsible for any cash discounts taken by customers upon payment of the factored receivables. Faeber is charged for these cash discounts upon reimbursement by the factor. During 2019, the factor collected the remaining amount of the factored receivables, minus the 2% discount on 94% of the collected receivables, and returned the balance owed to Faeber.

Dr Cash 5,684 (=$7,000 - $1,316)

Dr Sales discounts 1,316 (= $70,000 x 94% x 2%)

    Cr Factoring receivables 7,000

Faeber collected the remaining amount of the unfactored accounts receivable, minus the 2% discount on 96% of the collected receivables.

Dr Cash 29,424 (= $30,000 - $576)

Dr Sales discounts 576 (= $30,000 x 96% x 2%)

    Cr Accounts receivable 30,000

4% of the accounts receivable were collected at 100%, and 96% were collected at 98%.

You might be interested in
How can you use feedback from your clients?
Flauer [41]
The answer is d : the last one
8 0
3 years ago
Today you earn a salary of $28,500. What will be your annual salary fifteen years from
lys-0071 [83]

Answer:

$47.747.44

Explanation:

After 14 years, the salary will be equivalent to the future value of $28,500 at 3.5% compound interest.

The formula for calculating compound interest is as follows.

FV = PV × (1+r)n

where FV = Future Value

PV = Present Value... 28,500

r = annual interest rate.... 3.5%

n = number of periods...15

Fv = $28,500 x ( 1+ 3.5/100)15

Fv = $28,500  x ( 1+0.035)15

Fv =$28,500 x 1. 67534883

Fv =$47.747.44

3 0
3 years ago
A company must decide between scrapping or reworking units that do not pass inspection. The company has 13,000 defective units t
gregori [183]

Answer:

A.Incremental income(loss)

Sales as scrap $39,000

Rework $41,600

B.The company should REWORK

Explanation:

A. Sales as Scrap Rework

Sales of scrap units ($13,000×3.00)

$39,000

Sales of rework units ($13,000×8.20)

$106,600

Cost to rework units($13,000×5.00) $65,000

Incremental income(loss)

$39,000 $41,600

B.Therefore the company should REWORK

($106,600-$65,000)

=$41,600

8 0
3 years ago
The physical flow reconciliation is a report that:
Diano4ka-milaya [45]

Answer: The correct answer is "A. reconciles the physical units started in a period with the physical units completed in that period.".

Explanation: The physical flow reconciliation: reconciles the physical units started in a period with the physical units completed in that period.

Through this process it is possible to control, how many units are started in a period and how many are finished in that period.

5 0
3 years ago
As a result of a thorough physical inventory, Sheridan Company determined that it had inventory worth $320800 at December 31, 20
uranmaximum [27]

Answer:

Sheridan Company

The correct amount of inventory that Sheridan should report is:

= $367,100

Explanation:

a) Data and Calculations:

December 31 Inventory based on physical inventory =      $320,800

Goods held on consignment by Herschel =                            46,300

December 27, FOB destination goods ($22,000)                   0

Correct amount of inventory that Sheridan should report $367,100

b) Goods on consignment are generally the property of the consignor (supplier) and not the consignee's (retailer's).  Therefore, they must appear in the balance sheet of the consignor.  Goods on FOB destination remain the property of the supplier until they reach the buyer's destination.  This is why it is not included above.

6 0
2 years ago
Other questions:
  • What is most likely the author's purpose when writing an article on the history of cell phones?
    6·2 answers
  • You can invest in taxable bonds that are paying a yield of 9.4 percent or a municipal bond paying a yield of 7.65 percent. Assum
    7·1 answer
  • Based on the following information, what amount would be subtracted from the bank balance side of a checking account reconciliat
    14·1 answer
  • What healthy, positive action can the food industry take to reduce the national issue of weight gain? regulate the content of pr
    11·1 answer
  • Caspian Sea Drinks needs to raise $26.00 million by issuing additional shares of stock. If the market estimates CSD will pay a d
    7·2 answers
  • What do you mean by kharidar​
    7·1 answer
  • A firm which prepares its financial statements according to U.S. GAAP and uses a periodic inventory system had the following tra
    15·1 answer
  • Which type of degree is earned after a master’s degree?
    15·2 answers
  • Swifty Company manufactures and sells three products. Relevant per unit data concerning each product are given below. Product A
    8·1 answer
  • What do you need to become an FBI Agent?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!