ABC Company factored ₱3,500,000 of accounts receivable with a finance company. The factoring fee was 3% of the accounts purchased. The finance company withheld 10% of the purchase price to cover sales discounts, returns and allowances. 1. What amount of cash was received on the factoring of accounts receivable? 2. What amount should be recognized as loss on factoring?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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ABC Company factored ₱3,500,000 of accounts receivable with a finance company. The factoring fee was
3% of the accounts purchased. The finance company withheld 10% of the purchase price to cover sales
discounts, returns and allowances.
1. What amount of cash was received on the factoring of accounts receivable?
2. What amount should be recognized as loss on factoring?

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