Problem 16Lozano Company sells a portfolio of short-term accounts receivable with a carrying amount ofP900,000 for P1,000,000 and promises to pay up to P30,000 to compensate the buyer if andwhen any defaults occur. Lozano Company neither transfers nor retains substantially all therisks and rewards of ownership of the transferred asset, and retains control of the transferredasset.20. How much should be recognized as continuing involvement in the receivables?

Account receivables: Account receivables are the current asset that records the amount of credit…

Answered: 20. How much should be recognized as…

Business

Accounting

20. How much should be recognized as continuing involvement in the receivables?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 16
Lozano Company sells a portfolio of short-term accounts receivable with a carrying amount of
P900,000 for P1,000,000 and promises to pay up to P30,000 to compensate the buyer if and
when any defaults occur. Lozano Company neither transfers nor retains substantially all the
risks and rewards of ownership of the transferred asset, and retains control of the transferred
asset.
20. How much should be recognized as continuing involvement in the receivables?

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