Quagmire Company is preparing its financial statement for

the year #3937

Quagmire Company is preparing its financial statement for the year ended December 31,2011.
A summary of Quagmire’s accounts receivable sub-ledger shows die following
information:Required:a. Determine the amount of bad debts expense required for 2011.b. Show
the journal entry to record bad debts expense for 2011.c. Show the journal entry that was used
to record write-offs for 2011.d. Independent of the information above, suppose Quagmire
factored $2,000,000 of receivables without recourse. In exchange, it received $1,900,000. Show
the journal entry to record this transfer of receivables.e. In part (d), suppose Quagmire instead
factored the $2,000,000 of receivables with recourse and received $1,930,000 cash. Both
Quagmire and the factor anticipate that 2% of these receivables will prove to be uncollectible,
so the factor has held this amount to cover any uncollectible accounts. Should the amount of
uncollectible prove to be more or less than 2%, the difference will be paid by/refunded to
Quagmire. Show the journal entry to record this transfer of receivables.View Solution:
Quagmire Company is preparing its financial statement for the year

ANSWER
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