31. What is the total cash generated by PAGTALUNAN Company from factoring and assigning the accounts receivable? 32. What is the bad debts expense to be recognized by PAGTALUNAN Company in 2021?
31. What is the total cash generated by PAGTALUNAN Company from factoring and assigning the accounts receivable? 32. What is the bad debts expense to be recognized by PAGTALUNAN Company in 2021?
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 10EB: Starlight Enterprises has net credit sales for 2019 in the amount of $2,600,325, beginning accounts...
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On its second year, PAGTALUNAN, Inc. thought of expanding its business. In order to
generate additional cash necessary for this expansion, the company on September 1,
2021, factored P200,000 of accounts receivable to OCANA. Factoring fee was 10% of
the receivables purchased. OCANA Company withheld 5% of the purchase price as
protection against sales returns and allowances. On November 2, 2021, accounts
amounting to P500,000 was assigned to MONDALO Bank as a collateral on a P300,000,
20% annual interest rate loan. A 3% finance charge was deducted in advance. As of
December 31, 2021, data relating to accounts receivable follows:
Allowance for doubtful accounts – credit P6,700
Estimated uncollectible as a percentage of accounts receivables 2%
Accounts receivable excluding factored and assigned accounts 95,000
Collections on assigned accounts None
31. What is the total cash generated by PAGTALUNAN Company from factoring and
assigning the accounts receivable?
32. What is the bad debts expense to be recognized by PAGTALUNAN Company in
2021?
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