How much is the equity on the assigned account as of December 1?
Guru Corporation found itself running out of cash to pay for its currently due liabilities, and resorted to use its receivables as a source of financing. The following transactions occurred:
• The entity assigned 80% of their accounts receivable on November 2 on a notification basis. The total amount of
receivable at that time is ₱1,000,000, and the proceeds of the loan is 75% of the amount assigned.
• The term of the agreement includes a 1% per month interest rate every end of the month and the proceeds from the collection of account is applied first to the interest for the month.
• The bank provided notifications on November 30 and December 31. The collections made by the bank on November 30 is 40% of the accounts assigned, and the collections on December 31 is 50% of the accounts assigned. The bank remitted a check on December 31 with the notification.
• The entity had credit sales of ₱550,000 from November 2 to December 31. Sales returns during the same period is ₱2,000. Collections on the said sales total to ₱300,000.
How much is the equity on the assigned account as of December 1? [A] 200,000 [B] 194,000 [C] 286,000 [D] 480,000
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