On December 1, 2022, Grenade Company assigned specific accounts receivable totaling P2,000,000 as collateral on a P1,500,000, 9% note from a bank. In addition to the interest on the note, the bank also charged a 2.5% finance fee deducted in advance on the P1,500,000 value of the note. The December collections of assigned accounts receivable amounted to P1,000,000 less cash discounts of P20,000. The company accepted sales returns of P50,000 on the assigned accounts and wrote off assigned accounts of P75,000. The company notified the customers that their accounts have been assigned to the bank and must direct their payments to the assignee. 1. What amount of cash was received from the assignment of accounts receivable on December 1, 2022? 2. What is the carrying amount of note payable on December 31, 2022? 3. What is the balance of accounts receivable — assigned on December 31, 2022? 4. What amount should be disclosed as the equity of Grenade Company in assigned accounts on December 31, 2022?
On December 1, 2022, Grenade Company assigned specific accounts receivable totaling P2,000,000 as collateral on a P1,500,000, 9% note from a bank. In addition to the interest on the note, the bank also charged a 2.5% finance fee deducted in advance on the P1,500,000 value of the note. The December collections of assigned accounts receivable amounted to P1,000,000 less cash discounts of P20,000. The company accepted sales returns of P50,000 on the assigned accounts and wrote off assigned accounts of P75,000. The company notified the customers that their accounts have been assigned to the bank and must direct their payments to the assignee. 1. What amount of cash was received from the assignment of accounts receivable on December 1, 2022? 2. What is the carrying amount of note payable on December 31, 2022? 3. What is the balance of accounts receivable — assigned on December 31, 2022? 4. What amount should be disclosed as the equity of Grenade Company in assigned accounts on December 31, 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On December 1, 2022, Grenade Company assigned specific accounts receivable totaling P2,000,000 as collateral on a P1,500,000, 9% note from a bank. In addition to the interest on the note, the bank also charged a 2.5% finance fee deducted in advance on the P1,500,000 value of the note.
The December collections of assigned accounts receivable amounted to P1,000,000 less cash discounts of P20,000. The company accepted sales returns of P50,000 on the assigned accounts and wrote off assigned accounts of P75,000.
The company notified the customers that their accounts have been assigned to the bank and must direct their payments to the assignee.
The December collections of assigned accounts receivable amounted to P1,000,000 less cash discounts of P20,000. The company accepted sales returns of P50,000 on the assigned accounts and wrote off assigned accounts of P75,000.
The company notified the customers that their accounts have been assigned to the bank and must direct their payments to the assignee.
1. What amount of cash was received from the assignment of accounts receivable on December 1, 2022?
2. What is the carrying amount of note payable on December 31, 2022?
3. What is the balance of accounts receivable — assigned on December 31, 2022?
4. What amount should be disclosed as the equity of Grenade Company in assigned accounts on December 31, 2022?
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