Exercise 7-16 The trial balance before adjustment for Flint Company shows the fo

Question

Exercise 7-16 The trial balance before adjustment for Flint Company shows the following balances. Cr. Accounts Receivable Allowance for Doubtful Accounts Sales Revenue $82,300 3,700 $467,700 Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) To obtain additional cash, Flint factors without recourse $21,500 of accounts receivable with Stills Finance. The finance charge is 12% of the amount factored. To obtain a 1-year loan of $64,600, Flint assigns $67,200 of specific receivable accounts to Crosby Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Crosby Financial The company wants to maintain the Allowance for Doubtful Accounts at 5% of gross accounts receivable. Based on an aging analysis, an allowance of $5,318 should be reported. Assume the allowance has a credit balance of $1,175 1. 2. 3. 4. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation 1. Debit Credit

Explanation / Answer

No. Account Titles and Explanation Debit Credit 1 Cash ($21500 - $2580) 18920 Finance charge (12% x $21500) 2580 Accounts receivable 21500 2 Cash [$64600 - (8% x $64600)] 59432 Loss on sale of receivables 7768 Accounts receivable 67200 3 Bad debt expense [(5% x $82300) + $3700] 7815 Allowance for doubtful accounts 7815 4 Bad debt expense ($5318 - $1175) 4143 Allowance for doubtful accounts 4143

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.