Lea Company factored P 5,000,000 of accounts receivable. Control was surrendered by the entity. The finance company assessed of 2% and retains a hold back equal to 10% of the accounts receivable. In addition, the finance company charged 12% interest computed on a weighted average time to maturity of the accounts receivable for 30days? 1. What is the amount initially received from the factoring of accounts receivable? a. 4,250,000 b. 4,200,000 c. 4,700,685 d. 4,200,685 2. What total amount should be recognized as loss on factoring? a. 299,315 b. 799,315 c. 250,000 d. 0

Lea Company factored P 5,000,000 of accounts receivable. Control was surrendered by the entity. The finance company assessed of 2% and retains a hold back equal to 10% of the accounts receivable. In addition, the finance company charged 12% interest computed on a weighted average time to maturity of the accounts receivable for 30days? 1. What is the amount initially received from the factoring of accounts receivable? a. 4,250,000 b. 4,200,000 c. 4,700,685 d. 4,200,685 2. What total amount should be recognized as loss on factoring? a. 299,315 b. 799,315 c. 250,000 d. 0

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 11RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...

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