Answered: 31. What is the total cash generated by…

Name: On its second year, PAGTALUNAN, Inc. thought of expanding its business
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Description: 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 t

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter16: Accounting For Accounts Receivable

Section: Chapter Questions

Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...

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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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