Howatmakesmonthlypaymentstothebankforcash

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Unformatted text preview: eceivable. Disposition of Accounts and Notes Receivable Disposition of Accounts and Notes Receivable Company may transfer A/R or N/R to another company for cash because of: Competition (must sell products on credit, but may not be good at the collections game). Billing/collection are time­consuming and costly processes. Need for cash ­ money is tight or poor cash management practices employed. Transfer accomplished by: 1. Secured borrowing (PLEDGING) 2. Sale of receivables (FACTORING) Chapter 7-53 LO 8 Explain accounting issues related to disposition LO of accounts and notes receivable. of Secured Borrowing (PLEDGING) Secured Borrowing ((PLEDGING) PLEDGING) Secured Secured (PLEDGING) EASY STUFF!!! 1. Setup N/P and pay all “upfront” fees at start. 2. Collect own A/R and remit ALL $$$ collected N/P AND interest are paid off. until both Illustration: March 1, 2010, Howat, Inc. provides (or assigns) $700,000 of its A/R to Citizens Bank as collateral for a $500,000 note. Howat continues to collect the A/R and the debtors are NOT notified of...
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This note was uploaded on 01/29/2013 for the course ACC 223 taught by Professor Staff during the Fall '12 term at Niagara University.

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