On December 1, 2020, Company assigned specific accounts receivable totalling P4,000,000 as collateral on a P3,000,000, 12% note from a certain bank. The Mars will continue to collect the assigned accounts receivable (non-notification basis). In addition to the interest on the note, the bank also charged a 5% finance fee deducted in advance on the P3,000,000 value of the note. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discounts of P100,000. On December 31, 2020, Mars remitted the collections to the bank in payment for the interest accrued on December 31, 2020 and the note payable. Mars accepted sales return of P150,000 on the assigned accounts and wrote off assigned accounts of P200,000. What is the carrying amount of note payable on December 31, 2020?
On December 1, 2020, Company assigned specific accounts receivable totalling P4,000,000 as collateral on a P3,000,000, 12% note from a certain bank. The Mars will continue to collect the assigned accounts receivable (non-notification basis). In addition to the interest on the note, the bank also charged a 5% finance fee deducted in advance on the P3,000,000 value of the note. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discounts of P100,000. On December 31, 2020, Mars remitted the collections to the bank in payment for the interest accrued on December 31, 2020 and the note payable. Mars accepted sales return of P150,000 on the assigned accounts and wrote off assigned accounts of P200,000. What is the carrying amount of note payable on December 31, 2020?
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 12E: Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120...
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On December 1, 2020, Company assigned specific accounts receivable totalling P4,000,000 as collateral on a P3,000,000, 12% note from a certain bank. The Mars will continue to collect the assigned accounts receivable (non-notification basis). In addition to the interest on the note, the bank also charged a 5% finance fee deducted in advance on the P3,000,000 value of the note. The December collections of assigned accounts receivable amounted to P2,000,000 less cash discounts of P100,000. On December 31, 2020, Mars remitted the collections to the bank in payment for the interest accrued on December 31, 2020 and the note payable. Mars accepted sales return of P150,000 on the assigned accounts and wrote off assigned accounts of P200,000.
What is the carrying amount of note payable on December 31, 2020?
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