Title | Mountain High Ice Cream Company transferred |
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Author | Ksenia Fe |
Course | Intermediate Accounting I |
Institution | The University of Texas at San Antonio |
Pages | 1 |
File Size | 99.9 KB |
File Type | |
Total Downloads | 104 |
Total Views | 138 |
Download Mountain High Ice Cream Company transferred PDF
Mountain High Ice Cream Company transferred $75,000 of accounts receivable to the Prudential Bank. The transfer was made with recourse. 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 $6,500). Mountain High anticipates a $4,500 recourse obligation. The bank charges a 3% fee (3% of $75,000), 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)...