PONTEJO FINANCE CORPORATION purchases the accounts receivable of other companies on a without recourse, notification basis. At the time the receivables are factored, 15% of the amount factored is charged to the client as commission and recognized as revenue in PONTEJO’S books. Also, 10% of the receivables factored is withheld by PONTEJO as protection against sales returns or other adjustments. This amount credited by PONTEJO to the client Retainer account. At the end of each month, payments are made by PONTEJO to its clients so that the balance in the Client Retainer account is equal to 10% of unpaid factored receivables. Based on PONTEJO’S bad debt loss experience, an allowance for bad debts of 5% of all factored receivables is to be established, PONTEJO makes adjusting entries at the end of each month. On January 3, 2023, PEPITO Company factored its accounts receivable totaling P1,000,000. By January 31, P800,000 on these receivables had been collected by PONTEJO . 25. The commission earned of PONTEJO Finance Corporation from PEPITO Company’s accounts receivable factored is: 26. The proceeds received by PEPITO Company on the accounts factored is: 27. How much is the Client Retainer account of PONTEJO Finance Corporation at January 31, 2023 is:
PONTEJO FINANCE CORPORATION purchases the accounts receivable of other companies on a without recourse, notification basis. At the time the receivables are factored, 15% of the amount factored is charged to the client as commission and recognized as revenue in PONTEJO’S books. Also, 10% of the receivables factored is withheld by PONTEJO as protection against sales returns or other adjustments. This amount credited by PONTEJO to the client Retainer account. At the end of each month, payments are made by PONTEJO to its clients so that the balance in the Client Retainer account is equal to 10% of unpaid factored receivables. Based on PONTEJO’S bad debt loss experience, an allowance for bad debts of 5% of all factored receivables is to be established, PONTEJO makes adjusting entries at the end of each month. On January 3, 2023, PEPITO Company factored its accounts receivable totaling P1,000,000. By January 31, P800,000 on these receivables had been collected by PONTEJO . 25. The commission earned of PONTEJO Finance Corporation from PEPITO Company’s accounts receivable factored is: 26. The proceeds received by PEPITO Company on the accounts factored is: 27. How much is the Client Retainer account of PONTEJO Finance Corporation at January 31, 2023 is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
PONTEJO FINANCE CORPORATION purchases the accounts receivable of other
companies on a without recourse, notification basis. At the time the receivables are
factored, 15% of the amount factored is charged to the client as commission and
recognized as revenue in PONTEJO’S books. Also, 10% of the receivables factored is
withheld by PONTEJO as protection against sales returns or other adjustments. This
amount credited by PONTEJO to the client Retainer account. At the end of each month,
payments are made by PONTEJO to its clients so that the balance in the Client Retainer
account is equal to 10% of unpaid factored receivables. Based on PONTEJO’S bad debt
loss experience, an allowance for bad debts of 5% of all factored receivables is to be
established, PONTEJO makes adjusting entries at the end of each month.
On January 3, 2023, PEPITO Company factored its accounts receivable totaling
P1,000,000. By January 31, P800,000 on these receivables had been collected by
PONTEJO .
25. The commission earned of PONTEJO Finance Corporation from PEPITO Company’s
accounts receivable factored is:
26. The proceeds received by PEPITO Company on the accounts factored is:
27. How much is the Client Retainer account of PONTEJO Finance Corporation at
January 31, 2023 is:
28. How much is the bad debts expense of PONTEJO Finance Corporation at January
31, 2023 is:
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education