Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now

On June 30, 2011, Belinda Fixtures was considering alternatives to bolster its cash position. Option One called for transferring $400,000 in accounts receivable to Dogwood Finance Company without recourse for a 5% fee. Option Two calls for Belinda to transfer the $400,000 in receivables to Dogwood with recourse. Dogwood's charges a 4% fee for receivables factored with recourse. Option Two meets the conditions to be considered a sale, but Belinda estimates a $3,000 recourse liability. Under either option, Dogwood will immediately remit 90% of the factored receivables to Belinda, and retain 10%. When Dogwood collects the remaining receivables, it remits the amount, less the fee, to Belinda. Belinda estimates that the fair value of the final 10% of the receivables is $25,000 (ignoring the factoring fee). Required: 1. Prepare any necessary journal entry or entries if receivables are factored under Option One. 2. Prepare any necessary journal entry or entries if receivables are factored under Option Two.

On June 30, 2011, Belinda Fixtures was considering alternatives to bolster its cash position.
Option One called for transferring $400,000 in accounts receivable to Dogwood Finance
Company without recourse for a 5% fee. Option Two calls for Belinda to transfer the $400,000
in receivables to Dogwood with recourse. Dogwood’s charges a 4% fee for receivables factored
with recourse. Option Two meets the conditions to be considered a sale, but Belinda estimates
a $3,000 recourse liability. Under either option, Dogwood will immediately remit 90% of
the factored receivables to Belinda, and retain 10%. When Dogwood collects the remaining
receivables, it remits the amount, less the fee, to Belinda. Belinda estimates that the fair value of
the final 10% of the receivables is $25,000 (ignoring the factoring fee).
Required:
1. Prepare any necessary journal entry or entries if receivables are factored under Option One.
2. Prepare any necessary journal entry or entries if receivables are factored under Option Two.

Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now