Answered: The entity sold P1,500,000 of accounts…

Name: The entity sold P1,500,000 of accounts receivable for cash proceeds of
Uploaded: 2022-11-23T13:49:29.000Z
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Description: The entity sold P1,500,000 of accounts receivable for cash proceeds of P1,390,000. No bad debt allowance was associated with these accounts. On December 15, 2020, the entity assigned the remainder of the accounts receivable, P5,000,000 as of that dat

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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The entity sold P1,500,000 of accounts receivable for cash proceeds of P1,390,000. No bad debt allowance was associated with these accounts. On December 15, 2020, the entity assigned the remainder of the accounts receivable, P5,000,000 as of that date, as collateral on a P2,500,000, 12% annual interest rate loan. The entity received P2,500,000 less a 2% finance charge. None of the assigned accounts has been collected by the end of the year. Allowance for bad debts before adjustment, 12/31/2020 100,000 Estimated uncollectible, 12/31/2020 10% of accounts receivable Accounts receivable not including factored and assigned accounts 1,000,000 Accounts receivable – assigned 5,000,000 Accounts receivable – factored 1,500,000 28. What is the total amount of cash received from the financing of accounts receivable during the year? a. P3,840,000 b. P1,390,000 c. P3,890,000 d. P3,540,000 29. What total amount of accounts receivable should be reported as current assets on December 31, 2020? a. P6,000,000 b. P1,000,000 c. P5,000,000 d. P7,500,000 30. What is the bad debts expense for the current year? a. P600,000 b. P500,000 c. P650,000 d. P750,000

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