On February 1, 2020, ABC Corp factored receivables with a face amount of P600,000 to DEF Corp. DEF retains 5% of gross receivables factored. The total net amount received by ABC is P490,000. Prior to the sale of the receivables, it was determined that 2% of the receivables were deemed not collectible based on available information at that time. At the time of transfer, what amount of loss should ABC recognize?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On February 1, 2020, ABC Corp factored receivables with a face amount of P600,000 to DEF Corp. DEF retains 5% of gross receivables factored. The total net amount received by ABC is P490,000. Prior to the sale of the receivables, it was determined that 2% of the receivables were deemed not collectible based on available information at that time. At the time of transfer, what amount of loss should ABC recognize?

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