Otter Company has a receivable amounting to P1,200,000; Otter had previously established an Allowance for bad debts of P50,000 in connection with these receivables. Otter Company sold these receivables with recourse for P1,060,000. Otter received P1,000,000 cash immediately from the factor. The remaining P60,000 will be received once the factor verifies that none of the receivables is in dispute. Control was surrendered by Otter. The fair value of the recourse obligation is P26,000. The loss on factoring to be recognized by Otter Company is?
36. Otter Company has a receivable amounting to P1,200,000; Otter had previously established an Allowance for
Otter Company sold these receivables with recourse for P1,060,000. Otter received P1,000,000 cash immediately from the factor. The remaining P60,000 will be received once the factor verifies that none of the receivables is in dispute. Control was surrendered by Otter. The fair value of the recourse obligation is P26,000.
The loss on factoring to be recognized by Otter Company is?
37. Starboy Company has the following data relating to
|
Accounts receivable, January 1, 2022 |
P 480,000 |
|
Allowance for doubtful accounts, 1/1/22 |
28,600 |
|
Cash sales |
300,000 |
|
Sales on account, terms: 2/10, 1/15, n/30 |
2,560,000 |
|
Cash received from customers during the year |
2,400,000 |
|
Accounts written off during the year |
17,600 |
|
Cash refunds given to cash customers for sales returns and allowances |
15,000 |
|
Credit memoranda issued to credit customers for sales returns and allowances |
25,000 |
The P2,400,000 collection is composed of the following:
|
Collection from customers availing the 10-day discount period: |
|
|
|
Gross selling price |
P 1,440,000 |
|
|
Discount taken (1,440,000 x 2%) |
( 28,800) |
P 1,411,200 |
|
Collection from customers availing the 15-day discount period: |
|
|
|
Gross selling price |
800,000 |
|
|
Discount taken (800,000 x 1%) |
( 8,000) |
792,000 |
|
Collection from customers paying beyond the discount period: |
|
192,000 |
|
Collection of accounts previously written and subsequent recovered |
4,800 |
|
|
Total collection of accounts receivable for 2022 |
P 2,400,000 |
Starboy’s year-end balance of allowance for doubtful accounts was estimated to be 5% of the outstanding accounts receivable as at December 31, 2022.
What is the net realizable value of accounts receivable?
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