Accounting question - Not an accountant
Hey guys, i am not an accountant by my boss wants me to do a T chart showing the transaction between us and this other company. It involves trade receivables, fees, discounting, and maturity payment. I've calculated the values but im uncertain how to show the cash flow in a T chart. could someone help me out.
T charts refer to line items on a financial statement. So you draw a T and write "Cash" above one. Draw a T and write "Trade Receivable" above another one. Then for each journal entry you debit one T and have the corresponding credit(s) in another. It's quite simple. The hard part would be figuring out the values to enter and to ensure that it all balances out in the end A = L+ E
I am aware of how T charts work but given the below information how would i show it in a T chart. Cashflows: Cash Outflow on Settlement date:
Winning bid of trade receivables face value: $10,000,000 Less: Total Discount: (14,166.67) 20 Day Reserve: (9,444.44) Add: Fees: 2,500
Net Outflow: $9,978,888.89
Cash inflow on Maturity Date:
Net outflow: 9,978,888.89 Add: Total Discount: $14,166.67
Net Inflow: $9,995,555.56
http://www.wikihow.com/Account-For-Factoring
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