On April 1, 2020, Shalimar Company discounted with recourse a 9-month, 10% note dated January 1, 2020 with face of P6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for as a conditional sale with recognition of a contingent liability. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On December 31, 2020, the entity collected the dishonored note in full plus 12% (annual interest rate) from the maturity date up to settlement date based on face amount of the note for humanitarian reasons. What is the total amount collected from the customer on December 31, 2020?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

On April 1, 2020, Shalimar Company discounted with recourse a 9-month, 10% note dated January 1, 2020 with face of P6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for as a conditional sale with recognition of a contingent liability. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On December 31, 2020, the entity collected the dishonored note in full plus 12% (annual interest rate) from the maturity date up to settlement date based on face amount of the note for humanitarian reasons. What is the total amount collected from the customer on December 31, 2020?

On April 1, 2020, Shalimar Company discounted with recourse a 9-month, 10%
note dated January 1, 2020 with face of P6,000,000. The bank discount rate is
12%. The discounting transaction is accounted for as a conditional sale with
recognition of a contingent liability. On October 1, 2020, the maker dishonored
the note receivable. The entity paid the bank the maturity value of the note plus
protest fee of P50,000. On December 31, 2020, the entity collected the
dishonored note in full plus 12% (annual interest rate) from the maturity date up
to settlement date based on face amount of the note for humanitarian reasons.
What is the total amount collected from the customer on December 31, 2020? *
Your answer
N
re to search
Transcribed Image Text:On April 1, 2020, Shalimar Company discounted with recourse a 9-month, 10% note dated January 1, 2020 with face of P6,000,000. The bank discount rate is 12%. The discounting transaction is accounted for as a conditional sale with recognition of a contingent liability. On October 1, 2020, the maker dishonored the note receivable. The entity paid the bank the maturity value of the note plus protest fee of P50,000. On December 31, 2020, the entity collected the dishonored note in full plus 12% (annual interest rate) from the maturity date up to settlement date based on face amount of the note for humanitarian reasons. What is the total amount collected from the customer on December 31, 2020? * Your answer N re to search
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Financial Reporting in Hyperinflationary Economies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education