Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. use the information below to answer the next 3 que

Use the information below to answer the next 3 questions ABC Co. had the following...

80.2K

Verified Solution

Question

Accounting

Use the information below to answer the next 3 questions ABC Co. had the following balances on January 1, 2013: Accounts Receivable: $1,000,000 Allowance for doubtful accounts: $20,000 During January, ABC collected $300,000 of their receivables. ABC also made cash sales of $500,000 and credit sales of $400,000. ABC wrote off $5,000 in receivables and collected an additional $3,000 in receivables that were previously written off. On January 2, ABC factored $250,000 of their receivables with Finance, Inc. The three conditions were met and the factoring agreement was with recourse. Finance, Inc. assessed a 2% factoring fee and retained 3% of the factored receivables to protect against sales discounts or returns. ABC believes 4% of the factored receivables will be uncollectable. Sales returns and discounts for the month totaled $1,000. At the end of the month, ABC estimates their bad debt as 4% of using the Balance Sheet method (ignoring any Receivable from Factor accounts that may be recorded).

  1. Determine the amount of cash ABC would receive from Finance, Inc. at the time the receivables were factored
  2. Determine Bad Debt Expense for the month of January.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Physics
1.2K views

A large fish hangs from a spring balance supported from the roof of an elevator. Part A If...

Mechanical Engineering
1.2K views

Delta Wing Aircraft Specifications (do the necessary assumptions if needed) Wing Area: 585 m2 Wing Span: 32 m Taper...

Physics
1.2K views

1 23 In the arrangement as shown in the figure th stepped steel bar ABC...

Physics
1.2K views

Two bodies of equal masses are some distance apart If 20 of mass is transferred...

Basic Math
1.2K views

Here are the masses in kilograms of 2 groups of dolphins Use the medians to...

Calculus
1.2K views

https www webassig Q Sketch the circle Identify its center and radius x y 2x...

Accounting
1.2K views

Prepare the TRIAL BALANCE Month of April 2020 1) APR-1 the JW-Corp Received $200,000 in...

Accounting
1.2K views

Liz is an engineer who works at a firm of consulting engineers in Sydney, named...

Accounting
1.2K views

which form 8582 worksheet records the losses on a single form or schedule

Accounting
1.2K views

Express the following comparative income statements in common-size percents and assess whether or not this...

Finance
1.2K views

For my question that you say that needs more information kindly look on line for...

Accounting
1.2K views

The Heat Radiator Company uses a normal-costing system with a single manufacturing overhead cost pool...