Question

In: Accounting

The trial balance before adjustment for Misumi Ltd. shows the following balances (amounts in thousands).   Dr.     ...

The trial balance before adjustment for Misumi Ltd. shows the following balances (amounts in thousands).

  Dr.  

  Cr.  

Accounts Receivable

¥82,000

Allowance for Doubtful Accounts

  1,750

Sales Revenue

¥430,000

Instructions

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, Misumi factors without guarantee of credit loss ¥20,000 of accounts receivable with Stills Finance. The finance charge is 10% of the amount factored.

2. To obtain a one-year loan of ¥55,000, Misumi assigns ¥65,000 of specific receivable accounts to Obihiro Financial. The finance charge is 8% of the loan; the cash is received and the accounts turned over to Obihiro Financial.

3. The company wants to maintain Allowance for Doubtful Accounts at 5% of gross accounts receivable.

4. Based on an aging analysis, an allowance of ¥5,800 should be reported. Assume the allowance has a credit balance of ¥1,100.

Solutions

Expert Solution

Answer:

Sl. No General Ledger Debit Credit
1 Cash ¥            18,000
Loss on sale of receivables (20000*10%) ¥               2,000
   Accounts Receivable ¥            20,000
2 Cash ¥            50,600
Finance Charge (55000*8%) ¥               4,400
Notes payable ¥            55,000
3 Bad debt expense (82000*5%+1750) ¥               5,850
Allowance for doubtful debts ¥               5,850
4 Bad debt expense (5800-1100) ¥               4,700
Allowance for doubtful debts ¥               4,700

ekkarill92 answered 1 year ago
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