For Items 33-37: During 2020, Igado Corporation needed cash and use receivable to generate cash. Below are descriptions of the transactions that Igado entered to raise cash. • Apr 1: Igado assigned P150,000 of accounts receivable to a finance company with recourse. The finance company advanced Igado 80% of the face value of the receivables less a commission charge of 2% of the advance. In addition, there is a 1.25% per month interest charge on the unpaid loan balance at the beginning of the month. • June 30: P140,000 of the assigned accounts receivable were collected. Cash was remitted to the finance company in payment of the interest and the amount due. July 15: Igado transferred, without recourse, accounts receivable with a face value of P100,000 to the First Family Factoring Company. The allowance for doubtful accounts associated with these receivables was P4,500. The factoring fee was 10% of the receivables face value and factor holdback is P1,500. 33. In relation to April 1 transaction, how much is the net proceeds received by Igado from the assignment? a. 117,600 b. 147,000 c. 117,000 d. 120,000 34. In relation to the June 30 transaction, what will be the journal entry to record payment of the interest and amount due? a. Dr. Loan Payable - 140,000 & Interest expense - 5,625; Cr. Cash - 145,625 b. Dr. Loan Payable - 120,000 & Interest expense - 4,500 ; Cr. Cash - 124,500 c. Dr. Loan Payable – 140,000 & Interest expense - 5,250 ; Cr. Cash – 145,250 - d. Dr. Loan Payable - 120,000 & Interest expense - 5,625; Cr. Cash - 125,625 35. In relation to the June 30 transaction, how much Accounts Receivable assigned will be reclassified to Accounts Receivable (unassigned)? a. 20,000 b. 30,000 c. None - loan is not yet fully paid d. 10,000 36. In relation to the July 15 transaction, how much is the net proceeds received from the factoring? b. 88,950 d. 84,000 a. 88,050 c. 88,500
For Items 33-37: During 2020, Igado Corporation needed cash and use receivable to generate cash. Below are descriptions of the transactions that Igado entered to raise cash. • Apr 1: Igado assigned P150,000 of accounts receivable to a finance company with recourse. The finance company advanced Igado 80% of the face value of the receivables less a commission charge of 2% of the advance. In addition, there is a 1.25% per month interest charge on the unpaid loan balance at the beginning of the month. • June 30: P140,000 of the assigned accounts receivable were collected. Cash was remitted to the finance company in payment of the interest and the amount due. July 15: Igado transferred, without recourse, accounts receivable with a face value of P100,000 to the First Family Factoring Company. The allowance for doubtful accounts associated with these receivables was P4,500. The factoring fee was 10% of the receivables face value and factor holdback is P1,500. 33. In relation to April 1 transaction, how much is the net proceeds received by Igado from the assignment? a. 117,600 b. 147,000 c. 117,000 d. 120,000 34. In relation to the June 30 transaction, what will be the journal entry to record payment of the interest and amount due? a. Dr. Loan Payable - 140,000 & Interest expense - 5,625; Cr. Cash - 145,625 b. Dr. Loan Payable - 120,000 & Interest expense - 4,500 ; Cr. Cash - 124,500 c. Dr. Loan Payable – 140,000 & Interest expense - 5,250 ; Cr. Cash – 145,250 - d. Dr. Loan Payable - 120,000 & Interest expense - 5,625; Cr. Cash - 125,625 35. In relation to the June 30 transaction, how much Accounts Receivable assigned will be reclassified to Accounts Receivable (unassigned)? a. 20,000 b. 30,000 c. None - loan is not yet fully paid d. 10,000 36. In relation to the July 15 transaction, how much is the net proceeds received from the factoring? b. 88,950 d. 84,000 a. 88,050 c. 88,500
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 15P: Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed...
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I need solutions from 34 - 37. Thank you.
Transcribed Image Text:For Items 33-37:
During 2020, Igado Corporation needed cash and use receivable to generate cash. Below are
descriptions of the transactions that Igado entered to raise cash.
• Apr 1: Igado assigned P150,000 of accounts receivable to a finance company with recourse.
The finance company advanced Igado 80% of the face value of the receivables less a
commission charge of 2% of the advance. In addition, there is a 1.25% per month interest
charge on the unpaid loan balance at the beginning of the month.
●
June 30: P140,000 of the assigned accounts receivable were collected. Cash was remitted to
the finance company in payment of the interest and the amount due.
• July 15: Igado transferred, without recourse, accounts receivable with a face value of
P100,000 to the First Family Factoring Company. The allowance for doubtful accounts
associated with these receivables was P4,500. The factoring fee was 10% of the receivables
face value and factor holdback is P1,500.
33. In relation to April 1 transaction, how much is the net proceeds received by Igado from the
assignment?
a. 117,600
b. 147,000
c. 117,000
d. 120,000
34. In relation to the June 30 transaction, what will be the journal entry to record payment of the
interest and amount due?
a. Dr. Loan Payable - 140,000 & Interest expense - 5,625; Cr. Cash - 145,625
b. Dr. Loan Payable - 120,000 & Interest expense - 4,500; Cr. Cash - 124,500
c. Dr. Loan Payable - 140,000 & Interest expense - 5,250; Cr. Cash - 145,250
d. Dr. Loan Payable - 120,000 & Interest expense - 5,625; Cr. Cash - 125,625
35. In relation to the June 30 transaction, how much Accounts Receivable assigned will be
reclassified to Accounts Receivable (unassigned)?
a. 20,000
b. 30,000 c. None - loan is not yet fully paid d. 10,000
36. In relation to the July 15 transaction, how much is the net proceeds received from the
factoring?
a. 88,050
d. 84,000
6| Page
b. 88,950
c. 88,500
37. In relation to the July 15 transaction, how much is the loss on factoring?
d. 8,850
a. 10,000
b. None
c. 9,950
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