Guasha Corp. factored P600,000 of accounts receivable to Stalactite Corp. on October 1, 2020. Control was surrendered by Guasha. Stalactite accepted the receivables subject to recourse for nonpayment. Stalactite assessed a fee of 3% and retained a holdback equal to 5% of the accounts receivable. In addition, Stalactite charged 15% interest computed on a weighted-average time to maturity of the receivables of fifty-four days. The fair value of the recourse obligation is P9,000. Maria will receive and record cash of:

Guasha Corp. factored P600,000 of accounts receivable to Stalactite Corp. on October 1, 2020. Control was surrendered by Guasha. Stalactite accepted the receivables subject to recourse for nonpayment. Stalactite assessed a fee of 3% and retained a holdback equal to 5% of the accounts receivable. In addition, Stalactite charged 15% interest computed on a weighted-average time to maturity of the receivables of fifty-four days. The fair value of the recourse obligation is P9,000. Maria will receive and record cash of:

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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