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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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