Problem: Gipson Furniture factors $400,000 of receivables to Kwik Factors, Inc. Kwik Factors assesses a 3% service charge on the amount of receivables sold. Gipson Furniture factors its receivables regularly with Kwik Factors.
What journal entry does Gipson make when factoring these receivables?
A)
B)
C)
D)
An analysis and aging of the accounts receivable of Watts Company at December 31 reveal these data:
Accounts receivable $1600,000
Allowance for doubtful accounts per book before adjustment (credit) $100,000
Amounts expected to become uncollectible $130,000
What is the cash realizable value of the accounts receivable at December 31 after adjustment?
A) $1,370,000
B) $1,500,000
C) $1,600,000
D) $1,470,000.