On February 1, 2021, JANE Company factored receivables with a carrying amount of ₱300,000 to JACK Company. JACK Company assesses a finance charge of 3% of the receivables and retains 5% of the receivable for possible sales returns. Relative to this transaction, you are to determine the amount of loss on sale or factoring to be reported in the income statement of JANE Company for February. Assume that JANE factors the receivables on a without recourse basis. 1.) The loss to be reported is? *   a. 24,000 b. 0 c. 15,000 d. 9,000   2.) The amount of cash initially to be received is?   a. 276,000 b.  300,000 c.  285,000 d.  291,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On February 1, 2021, JANE Company factored receivables with a carrying amount of ₱300,000 to JACK Company. JACK Company assesses a finance charge of 3% of the receivables and retains 5% of the receivable for possible sales returns. Relative to this transaction, you are to determine the amount of loss on sale or factoring to be reported in the income statement of JANE Company for February. Assume that JANE factors the receivables on a without recourse basis.

1.) The loss to be reported is? *
 
a. 24,000
b. 0
c. 15,000
d. 9,000
 
2.) The amount of cash initially to be received is?
 
a. 276,000
b.  300,000
c.  285,000
d.  291,000
 
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