9.Tito Company entered into an assignment arrangement with Easy Bank whereby the assignee would advance 80% of all accounts assigned less P2,000 service charge. During the year, P400,000 of accounts receivable were assigned; P250,000 collections were made on these assigned accounts which were remitted to Easy Bank to apply first to P3,200 interest and the balance to principal. Sales returns and allowances on assigned accounts amounted to P5,000. After considering all of the foregoing transactions, how much is Tito Company's equity in assigned accounts disclosed in the notes to the financial statements?
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
9.Tito Company entered into an assignment arrangement with Easy Bank whereby the assignee would advance 80% of all accounts assigned less P2,000 service charge. During the year, P400,000 of
After considering all of the foregoing transactions, how much is Tito Company's equity in assigned accounts disclosed in the notes to the financial statements?
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