The trial balance before adjustment for sheffield company shows the
July 31st, 2020
The trial balance before adjustment for Sheffield Company shows the following balances.
|
Dr. |
Cr. |
|||
| Accounts Receivable | $84,800 | |||
| Allowance for Doubtful Accounts | 2,420 | |||
| Sales Revenue | $434,200 |
Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.)
| 1. | To obtain additional cash, Sheffield factors without recourse $29,700 of accounts receivable with Stills Finance. The finance charge is 11% of the amount factored. | |
| 2. | To obtain a 1-year loan of $57,600, Sheffield assigns $72,000 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. | |
| 3. | The company wants to maintain the Allowance for Doubtful Accounts at 6% of gross accounts receivable. | |
| 4. | Based on an aging analysis, an allowance of $5,733 should be reported. Assume the allowance has a credit balance of $1,071. |
(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.)
