PLKO Co. factored P160,000 accounts receivable to NCD Financing Corp on a with recourse basis on January 1, 2018. NCD charged a 4% service fee and retained a 10% holdback to cover expected sales returns. In addition, NCD charged 12% interest computed on a weighted average time to maturity of the receivables of 73 days over 365 days. PLKO Co. determines that the recourse obligation has a fair value of P3,000. How much is the loss on sale of receivables recognized on January 1, 2018 assuming the factoring was made on a casual basis?
PLKO Co. factored P160,000 accounts receivable to NCD Financing Corp on a with recourse basis on January 1, 2018. NCD charged a 4% service fee and retained a 10% holdback to cover expected sales returns. In addition, NCD charged 12% interest computed on a weighted average time to maturity of the receivables of 73 days over 365 days. PLKO Co. determines that the recourse obligation has a fair value of P3,000. How much is the loss on sale of receivables recognized on January 1, 2018 assuming the factoring was made on a casual basis?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...
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