Questions: On March 3, Sheridan Appliances sells 768,600 of its receivables to Western Factors Inc. Western Factors Inc. assesses a service charge of 5% of the amount of receivables sold. Prepare the entry on Sheridan Appliances' books to record the sale of the receivables. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 3

On March 3, Sheridan Appliances sells 768,600 of its receivables to Western Factors Inc. Western Factors Inc. assesses a service charge of 5% of the amount of receivables sold. Prepare the entry on Sheridan Appliances' books to record the sale of the receivables. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 3
Transcript text: On March 3, Sheridan Appliances sells $\$ 768,600$ of its receivables to Western Factors Inc. Western Factors Inc. assesses a service charge of $5 \%$ of the amount of receivables sold. Prepare the entry on Sheridan Appliances' books to record the sale of the receivables. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Mar. 3
failed

Solution

failed
failed

Solution Steps

Solution Approach

To record the sale of receivables, we need to account for the cash received and the service charge. The cash received is the total receivables minus the service charge. The service charge is calculated as 5% of the total receivables. The journal entry will debit cash for the amount received, debit service charge expense for the service charge, and credit accounts receivable for the total receivables sold.

Step 1: Calculate the Service Charge

The service charge is calculated as \( 5\% \) of the total receivables sold. Thus, we have:

\[ \text{Service Charge} = 0.05 \times 768600 = 38430.0 \]

Step 2: Calculate the Cash Received

The cash received from the sale of receivables is the total receivables minus the service charge:

\[ \text{Cash Received} = 768600 - 38430 = 730170.0 \]

Step 3: Prepare the Journal Entry

The journal entry to record the sale of the receivables is as follows:

  • Debit:

    • Cash: \( 730170.0 \)
    • Service Charge Expense: \( 38430.0 \)

  • Credit:

    • Accounts Receivable: \( 768600 \)

Final Answer

The journal entry can be summarized as:

\[ \text{Debit: Cash} = 730170.0, \quad \text{Debit: Service Charge Expense} = 38430.0, \quad \text{Credit: Accounts Receivable} = 768600 \]

Thus, the final answer is:

\[ \boxed{\text{Journal Entry Recorded}} \]

Was this solution helpful?
failed
Unhelpful
failed
Helpful

Questions asked by other users

failedAnswered
An employment information service claims the mean annual salary for senior level product engineers is 99,000. The annual salaries (in dollars) for a random sample of 16 senior level product engineers are shown in the table to the right. At alpha=0.01, test the claim that the mean salary is 99,000. Complete parts (a) through (e) below. Assume the population is normally distributed. Annual Salaries 100,627 96,301 93,591 112,783 82,571 74,234 77,022 80,943 102,417 76,200 104,072 104,036 91,077 82,162 85,025 110,222 (c) Find the standardized test statistic, t. The standardized test statistic is t= (Round to two decimal places as needed.)
failedAnswered
Which part of RAM do local scope variables and parameters exist in?
failedAnswered
Use the following results from a test for marijuana use, which is provided by a certain drug testing company. Among 147 subjects with positive test results, there are 27 false positive results; among 160 negative results, there are 2 false negative results. If one of the test subjects is randomly selected, find the probability that the subject tested negative or did not use marijuana. (Hint: Construct a table.) The probability that a randomly selected subject tested negative or did not use marijuana is (Do not round until the final answer. Then round to three decimal places as needed.)
failedAnswered
A term that includes a variable and its coefficient in an algebraic expression is called a term.
failedAnswered
Evaluate the expression when n=8 n(1-n)=[?]