On December 1, 2020, RB Company assigned on a non-notification basis accountsreceivable of Php6,000,000 to a bank in consideration for a loan of 80% of theaccounts less a 5% service fee on the accounts assigned. The entity signed a note forthe bank loan. On December 31, 2020, the entity collected assigned accounts ofPhp2,000,000 less discount of Php200,000. The entity remitted the collections to theLbank in partial paytment for the loan. The bank applied first the collection to the interestand the balance to the principal. The agreed interest is 1% per month on the loanbalance. The entity accepted sales returns of Php100,000 on the assigned accounts andwrote off assigned accounts totaling Php300,000.What is the balance of accounts receivable assigned on December 31, 2020?

Accounts receivable assignment seems to be a contract where a firm assigns its receivables to a…

On December 1, 2020, RB Company assigned on a non-notification basis accounts receivable of Php6,000,000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity signed a note for the bank loan. On December 31, 2020, the entity collected assigned accounts of Php2,000,000 less discount of Php200,000. The entity remitted the collections to the bank in partial paytment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per monih on the loan balance. The entity accepted sales returns of Php100,000 on the assigned accounts and wrote off assigned accounts totaling Php300,000.

On December 1, 2020, RB Company assigned on a non-notification basis accounts receivable of Php6,000,000 to a bank in consideration for a loan of 80% of the accounts less a 5% service fee on the accounts assigned. The entity signed a note for the bank loan. On December 31, 2020, the entity collected assigned accounts of Php2,000,000 less discount of Php200,000. The entity remitted the collections to the bank in partial paytment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per monih on the loan balance. The entity accepted sales returns of Php100,000 on the assigned accounts and wrote off assigned accounts totaling Php300,000.

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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