5. The creditors of EEE Company agreed to the following concession in recognition of it's deteriorating financial condition: • ABC Corporation, one of EEE's suppliers, agreed to accept merchandise at its normal selling price of P1,350,000 in full satisfaction of P1,458,000 overdue accounts receivable from EEE. The cost of the merchandise to EEE was P1,100,000. ABC's accounts receivable from BSA included a P135,000 allowance for doubtful accounts. • Philippine Prudential Bank, agreed to accept 2,000 shares of EEE's P450 par ordinary shares with a current market price of P800 per share in full satisfaction of P2,025,000 note and P180,000 accrued interest due from EEE. PPB has provided a P450,000 allowance for this note. Determine the total gain or loss resulting from the concession.

5. The creditors of EEE Company agreed to the following concession in recognition of it's deteriorating financial condition: • ABC Corporation, one of EEE's suppliers, agreed to accept merchandise at its normal selling price of P1,350,000 in full satisfaction of P1,458,000 overdue accounts receivable from EEE. The cost of the merchandise to EEE was P1,100,000. ABC's accounts receivable from BSA included a P135,000 allowance for doubtful accounts. • Philippine Prudential Bank, agreed to accept 2,000 shares of EEE's P450 par ordinary shares with a current market price of P800 per share in full satisfaction of P2,025,000 note and P180,000 accrued interest due from EEE. PPB has provided a P450,000 allowance for this note. Determine the total gain or loss resulting from the concession.

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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