Dealing with accounts receivable with important knowledge points of CMA
Accounts receivable factoring means that a company sells its accounts receivable to a third party at a discount. Factoring transactions can be divided into accounts receivable factoring (selling) without recourse and accounts receivable factoring (selling) with recourse according to whether the factor can finally receive the payment.
1, amount received without recourse = face value of accounts receivable ×[ 1_ (agency fee%+deposit%)]
Loss on sale of accounts receivable = face value of accounts receivable × agency fee%
2. Recourse amount received = face value of accounts receivable ×[ 1_ (agency fee%+deposit%)]
Loss on sale of accounts receivable = face value of accounts receivable × agency fee%+recourse liability (estimated value)
Note: The agency fee is commission and the deposit is provision for doubtful debts.
Case analysis of accounts receivable disposal
If company A sells to customer B on credit, it will generate accounts receivable of $50,000. Now Company A sells accounts receivable to Factor C in a new way. C The discount rate charged by the bill discounter is 6%. The additional profit rate is 3%. According to the evaluation of management accounting of Company A, the amount that Company B can finally pay is $42,000. For the $8,000 that Company B cannot pay to the factor, the factor has the right to recover from Company A.. Therefore, the fair value of the recourse debt undertaken by Company A is $8,000. What is the cash amount received by Company A from Factor C? What is the loss of selling accounts receivable?
Analysis: Cash received = 50,000 * (1-6%-3%) = 45,500,
Loss on sale of accounts receivable = 50000 * 6%+8000 =11000.
Accounting treatment is as follows:
Debit: Cash on hand is $45,500.
The loss from the sale of accounts receivable is $65,438+$065,438+$0,000.
The bad debt reserve of the factor is $65,438+0,500.
Credit: accounts receivable of $50,000.
8000 dollars for recourse